CBS Board Votes to Dilute NAI Stock; Final Decision Up to Courts
The CBS board voted to dilute National Amusements Inc.’s ownership stake Thursday, and now the Delaware Court of Chancery will decide, CBS said in a release that evening. The vote “was pure pretext,” NAI said (see 1805170038). “CBS management and…
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
the special committee cannot wish away the reality that CBS has a controlling shareholder.” The CBS board dividend was approved by all CBS board members unaffiliated with NAI, and if issued, would dilute the voting interest from about 79 percent to about 20 percent, CBS said. NAI Wednesday changed the CBS board’s bylaws to require a supermajority vote for matters such as the dividend. That was “plainly necessary,” given the vote Thursday, NAI said. “The written consents delivered by NAI purporting to amend the Company’s bylaws are neither valid nor effective,” CBS said. The vote is conditioned on a final determination by the Delaware court, including on whether the dividend is permissible, CBS said. The same court Thursday rejected a CBS motion for a temporary restraining order against NAI. CBS said the vote to dilute NAI’s stock was needed to keep NAI and its head, Shari Redstone, from compelling CBS to combine with the NAI-controlled Viacom. “As National Amusements has repeatedly stated, it has no intention of forcing a merger that is not supported by both CBS and Viacom,” NAI said. CBS also voted Thursday to delay its 2018 annual meeting of stockholders, which had been set for Friday. “The Board will determine shortly a new record date for the meeting,” CBS said. “The postponement will provide all constituents with additional time to consider all pertinent matters before the annual meeting.” S&P Global Ratings placed CBS on “CreditWatch with negative implications,” it said in an email Thursday evening. “Considerable uncertainty surrounds the control and management of CBS."