The Latest: CBS approves dividend in face of likely veto
DOVER, Del. (AP) — The Latest on the battle between CBS Corp. and its controlling shareholders, National Amusements Inc. (all times local):
Most of CBS Corp.’s board has approved a special dividend that could enable the company to break free from its controlling shareholder, but the power struggle’s outcome still hinges on an ongoing legal battle.
National Amusement Inc., currently CBS’s majority shareholder, would have its voting stake reduced from 79 percent to 17 percent if the dividend is issued.
But that can’t happen unless CBS can overturn a recent change requiring the dividend be approved by a “supermajority” of its 15-member board .
The dividend was approved by all of CBS’s directors not affiliated with NAI. That means NAI can still veto the dividend and preserve its control.
NAI, led by the daughter of media mogul Sumner Redstone, indicated it would block the dividend in a statement that called Thursday’s vote “pure pretext.”
CBS postponed an annual shareholder meeting scheduled for Friday until the matter is resolved in Delaware court.
A Delaware judge has refused to grant CBS Corp. a restraining order against its majority shareholder in a power struggle that could decide control of the company.
The judge said Thursday there was no court precedent to grant the relief CBS sought in trying to prevent National Amusements Inc. from trying to thwart a board vote scheduled for later Thursday on a dividend that would dilute National Amusement’s preferred stock voting power from 80 percent to 17 percent, effectively giving CBS independence.
National Amusements responded to CBS’s lawsuit by rewriting company bylaws to require a “supermajority” to approve the dividend.
While denying the restraining order, the judge noted CBS could still file a court challenge if NAI takes actions inconsistent with its fiduciary obligations to the company and other shareholders.