Yeah, this is pretty amusing. Looks like Moonves' corporate yes-men are hard at work trying to keep him on top. I wouldn't mind a little less Les Moonves myself.
Yeah, this is pretty amusing. Looks like Moonves' corporate yes-men are hard at work trying to keep him on top. I wouldn't mind a little less Les Moonves myself.
- Moonves and other CBS executives have been stewing for months over CBS' falling stock price as investors became skittish about the potential for a merger with the weaker company, Viacom.
- Only two years ago, Shari Redstone and her ailing father, Sumner Redstone, unilaterally made changes to Viacom's board, which immediately tilted the balance of power and led to sweeping management changes.
- CBS does not want to be weighed down by Viacom's cable channels, including MTV, Comedy Central, VH1 and Nickelodeon, which have lost steam in the ratings as viewers switch to streaming services that don't have commercials.
^^^^- The suit seeks to eliminate the Redstone family's clout by treating them like ordinary shareholders. Although the Redstone family owns just 10.3% of CBS' stock, they hold preferred shares — A shares — which give them nearly 80% of the vote.
It is indeed insane they have that much voting power. The entire merger seems to be about saving Viacom after the decisions they as a company have made and the changes the Redstone family made with its leadership. CBS seems to be expected to put itself at risk to save Viacom and to make sure the Redstone's investment isn't lost after their bad decisions. Its no wonder the lawsuit happen and there is huge push back. Moonves seems to be running CBS extremely well.And this last point seems insane in that something like that setup was ever agreed to in the first place (and this was long before these merger talks started) - a 10% stockholder with 80% of the board vote?![]()
they're suing the redstones and their company national amusements claiming that by forcing the merger, they're reneging on their financial obligation to protect CBS as board members. basically, yes they have the voting power to force the merger, but CBS argues it would harm CBS and is therefore a violation of their obligation as board members.Can someone explain to me how CBS can sue its own parent company? Can't the parent company just go, "Haha, that's nice," and change the entire Board of Directors?
The Redstone family, through its investment vehicle, National Amusements Inc., said it had amended CBS' bylaws to prevent further changes or authorizations of dividends without the agreement of a supermajority of board members.
CBS has planned to hold a special board meeting Thursday, intending to issue a dividend that would give voting power to CBS shareholders who currently lack that power. That would dilute the Redstones' control over the company's affairs. Instead of controlling the company, with nearly 80% of the vote, the family's voting stake would be reduced to 17%.
CBS said there was a provision in its charter that allows for such a dividend. It asked the judge to block the Redstones from making any changes to its board before Thursday's vote could take place and the vote's results could be put into effect. But National Amusements did just that on Wednesday.
"National Amusements Inc. believes the irresponsible action taken by CBS and its special committee put in motion a chain of events that poses significant risk to CBS," the Redstone family said in a statement midday Wednesday. "Due to the magnitude of this threat, NAI was compelled to take this measured step to protect its position while also mitigating further disruption to CBS."
At this point it’s a given.So if CBS loses, I imagine Moonves gets fired.
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