The juicy drama in the CBS corporate boardroom makes Real Housewives look like C-SPAN.
As of this week, CBS’s board has both sued and obtained a restraining order against controlling shareholder Shari Redstone to keep her away from a vote this morning that could eliminate her chokehold on the company — and prevent the Viacom merger she’s been championing against their will.
A catfight decades in the making
Viacom and CBS were a single entity up until 2006, when the Redstone family split them into an independent CBS and a pared-down Viacom.
But, Redstone still owns both companies, and even though her shares only represent 10.3% of CBS’ stock, they are all preferred “A” shares — giving her 80% voting power.
As CBS continues to lose value, it has sought partners to help spur growth — but now, with Redstone strong-arming it into an unwanted Viacom partnership, its stock is tanking even harder.
The plan? Force Redstone to vote like a commoner
A CBS board coalition led by CEO Les Moonves filed a lawsuit Monday claiming Scary-Shari is causing “irreversible harm to the company and its stockholders” with her selfish merger moves.
The lawsuit outlines a plan to issue dividends to existing shareholders — diluting Redstone’s voting power from 80% to 17%.
The fear is that Redstone will fire them before the suit is finished (just like she gutted Viacom’s disagreeable board 2 years ago) —which is why board members are holding a dividend vote this morning.
Stay tuned for today’s episode of ‘Keeping up with CBS’
After learning of the meeting, Redstone rewrote CBS’ bylaws to require a 90% supermajority to call special board meetings.
But, since the bylaw change doesn’t legally go into effect for 20 days, and since Moonves won his 24-hour Red-straining order, today’s meeting will go on — without Shari.
If the board strips Redstone’s controlling stake, CBS and Captain Moonves will be free to woo new suitors in place of Viacom.
If the board votes “nay,” Redstone will likely push mutinous Moonves out of CBS — with a $150m golden parachute to cushion the landing.
If CBS could just make TV shows this dramatic it would be doing fine…
