CBS said in a statement that it had cancelled its annual meeting of stockholders, scheduled for Friday, where investors were expected to vote on a slate of directors to the board. It then dismissed CBS efforts to prevent such a transaction as "pure pretext".
In other CBS news, CEO Leslie Moonves sold 75,000 shares of the firm's stock in a transaction on Wednesday, May 9th. "In light of the board's action today, that action was plainly necessary, and it is valid".
The ruling by a DE judge is a victory for Redstone, a CBS director and president of the family's movie-theater operator National Amusements Inc., in her push to merge the media company with Viacom Inc. - also controlled by NAI - over the wishes of CBS Chief Executive Officer Leslie Moonves. Markston International LLC bought a new position in shares of CBS during the first quarter valued at approximately $100,000. Bouchard said CBS has "extensive power to provide redress if Ms. Redstone takes action inconsistent with the fiduciary obligations owed by a controlling shareholder".
"CBS management and the special committee can not wish away the reality CBS has a controlling shareholder", Thursday's statement from National Amusements reads.
The upshot: National Amusements will contest the move, so it's not yet close to over.
A CBS special committee had determined the dividend was key to keeping Redstone from merging CBS with Viacom, which the family also controls through its ownership of 80 percent of that company's voting shares, the committee said. Shortly before Wednesday's hearing, she changed the CBS bylaws to require a supermajority vote on matters like this.
"CBS management and the special committee can not wish away the reality that CBS has a controlling shareholder", NAI said in a statement.
"While we are disappointed that the judge did not grant a TRO, the ruling clearly recognizes that we may bring further legal action to challenge any actions by NAI that we consider to be unlawful, and we will do so", the company said. (NYSE:CBS) by 4.4% in the 1st quarter, according to the company in its most recent 13F filing with the SEC. He cited a previous DE court ruling that said a controlling shareholder has a right to take a pre-emptive first move to protect its control interest in the face of company's plan to dilute that voting control.
Meanwhile, CBS has pledged that if the board approves the dividend, it would not issue any shares or cause the dividend to become effective without the judge's consent.
The Redstone holding company controls about 10 percent of the equity of CBS but has almost 80 percent of the voting power through a special share class.
Bouchard seemed to be referencing Redstone's last-minute move to throw a wrench in the CBS plan.
CBS officials noted that Bouchard found that the allegations in its lawsuit were sufficient to state a plausible legal claim for breach of fiduciary duty against Redstone and NAI.
In a statement, National Amusements said, "We are pleased by the court's decision to deny CBS and its special committee's unprecedented motion to try to deprive a shareholder of its fundamental voting rights".
Redstone, who took over as NAI's overseer after health issues sidelined her billionaire father, opposed the split of the two companies.