CBS shares rose 4.7 per cent to $54.98 in NY on Monday on hopes of a better deal for the company, giving it a market value of $20 billion. "(CBS) Lawsuit Means All Out War, Rules Out Friendly Transaction with Viacom (VIAB) - CNBC", Streetinsider.com published: "Viacom (VIAB) May option implied volatility increases after CBS (CBS) files suit against National Amusements" on May 14, 2018.
CBS has called a special board meeting for Thursday to consider issuing a dividend that would dilute the voting power of the holding company from 79 per cent to 17 per cent.
CBS said the committee is seeking to "protect stockholders' interests and unlock significant stockholder value". With Monday's Closing Bell on Wall Street, CBS shares were up $1.14 to $53.66 - their highest close since April 4.
A representative for Shari Redstone was not immediately available to comment. The talks, that started in February, had hit an impasse over disagreements about price as well as the role of Viacom Chief Executive Bob Bakish in the combined company, sources said earlier this month.
In its lawsuit, CBS cited the battle for control of publisher Hollinger International Inc, which like CBS had a controlling shareholder, Conrad Black, who wanted to sell control of the company over opposition from the board.
Redstone reportedly expressed her willingness to replace CBS directors to compel a merger with Viacom regardless of the Special Committee's process, deliberations, and conclusion'.
"If consummated, the dividend would enable the company to operate as an independent, non-controlled company and more fully evaluate strategic alternatives", CBS stated. While there may be an obvious cultural misalignment between Verizon and CBS, a tie-up between the No. 1 US wireless carrier and the TV-network owner would be a natural response to the $109 billion pending merger between their rivals, AT&T Inc. and Time Warner Inc.
Analysts have said a merger would benefit Viacom more than the stronger CBS.
CBS is pursuing a temporary restraining order against Redstone to prevent alleged abuse of voting control and interference with intended share dilution.