Finsbury Sides With Redstones in Battle for CBS

As Redstone battle looms Moonves is MIA at CBS event

As Redstone battle looms Moonves is MIA at CBS event

Such a move would have effectively given CBS independence from National Amusements. The Company believes that the written consents delivered by NAI purporting to amend the Company's bylaws are neither valid nor effective. "In light of the board's action today, that action was plainly necessary, and it is valid".

On Thursday, a judge in Delaware Chancery Court chose to reject CBS' motion for a restraining order.

The proposed dividend would not dilute the economic interests of any CBS stockholder, but would help the company to operate as an independent, non-controlled company and fully evaluate strategic alternatives, CBS has said.

That filing came in response to a complaint filed Monday by CBS against National Amusements, led by the daughter of billionaire media mogul Sumner Redstone.

If the board strips Redstone's controlling stake, CBS and Captain Moonves will be free to woo new suitors in place of Viacom.

NAI was also happy with the ruling from DE, saying in its own statement, "The court's ruling today represents a vindication of National Amusements' right to protect its interests".

The development comes after CBS, now led by CEO Leslie Moonves, filed a surprise lawsuit on Monday that alleges Redstone has breached fiduciary duties in her alleged attempt to force a merger between CBS and Viacom.

The bylaw change came just an hour before the hearing in DE to consider CBS' request for a temporary restraining order against the Redstones - a move that seemed to startle even the judge overseeing the case.

Redstone "had the legal right to change bylaws", BTIG analyst Rich Greenfield said.

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In a statement, CBS vowed to continue its fight in court.

"While we are disappointed that the judge did not grant a (restraining order), the ruling clearly recognizes that we may bring further legal action to challenge any actions by NAI that we consider to be unlawful, and we will do so", CBS said.

NAI, in a statement, said it is pleased the court denied the attempt of CBS' special committee "to deprive a shareholder of its fundamental voting rights". CBS decided earlier this week that a recombination with Viacom, from which is officially split in 2005, would not be in the best interest of its shareholders.

While the judge seems to be aware of the stakes and what may be a precedential decision when it comes time to rule on the underlying merits of CBS' complaint, he also had to consider Redstone's "self-help", which commanded a lot of attention at the hearing, Bouchard also wondered about the harm in allowing the meeting to go forward.

Bouchard wrote that CBS may have an argument that National Amusements, which has controlling shares in CBS and Viacom, has breached its fiduciary duty. The amendment requires 90% of the CBS board to approve the stock dividend; this is not likely to happen as two board members are allied with NAI. Meanwhile, CBS accused Redstone of eschewing a third-party offer for the company and refusing to submit the suggested deal with Viacom to a stockholder vote.

National Amusements said on Monday it did not intend to replace the board, but on Wednesday signaled that had changed.

But Redstone's camp says she has no intent to "force" a merger.

The Redstones haven't (in the judge's view) done anything truly damaging to shareholders yet, so the judge is denying the restraining order; but if they do something that appears truly damaging, the judge may well intervene.

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