Media heiress Shari Redstone is hitting back at CBS again, this time claiming the broadcasting giant’s CEO Les Moonves used hardball tactics as he pushed to strip her of voting control over the company.
In a 66-page lawsuit filed Tuesday in Delaware, the daughter of ailing 95-year-old billionaire Sumner Redstone portrays Moonves as an overpaid, power-hungry mogul who has tried to undermine her clout as CBS’s controlling shareholder through her holding company, National Amusements.
That includes an extraordinary vote by the CBS board last week to dilute Redstone’s 80 percent voting control by issuing a dividend. Redstone retaliated by amending CBS’s bylaws to block the move, and a judge will decide the outcome.
Moonves “has tired of having to deal with a stockholder with voting control and has taken particular umbrage that the exercise of such stockholder’s control has migrated from Sumner Redstone to his daughter, Ms. Redstone,” the complaint alleges.
Even worse, the suit claims one CBS director, Charles Gifford, “acted in an intimidating and bullying manner” toward Redstone, “including on one occasion by grabbing her face and directing her to listen to him.”
Gifford later apologized, telling Redstone that “that was how he treats his daughters when he wants their attention” — with Redstone responding that “She was not Mr. Gifford’s daughter but instead the vice chair of CBS,” according to the suit.
CBS, in a statement, denied Redstone’s claim that Gifford got physical with her.
“Ms. Redstone’s issue with Mr. Gifford is that he has always operated by an entirely different definition of what it means to be an independent director – namely to act in the best interest of all CBS shareholders, a CBS spokesperson said in a statement. “As a result of Mr. Gifford’s steadfast belief in good corporate governance, it is unfortunate and revealing that NAI has resorted to baseless personal attacks that are clearly tied to the execution of Mr. Gifford’s duties in this matter.”
Elsewhere, Redstone’s Tuesday filing claims that Moonves had been open to the idea of merging CBS with Viacom, the cable TV giant that Redstone also controls through National Amusements.
That’s in contrast to claims by CBS, which alleged in a suit last week that Redstone had tried to force CBS into a Viacom merger, threatening to replace CBS board members if they didn’t vote for it.
According to Redstone’s suit, she and Moonves discussed and agreed that combining CBS and Viacom would “benefit” both companies’ shareholders, “providing greater scale as needed for success in today’s media and entertainment landscape, and better positioning the companies for a larger transaction in which the combined entity could fetch an attractive premium that neither CBS nor Viacom alone could command.”
What’s more, Redstone alleges she told Moonves that NAI would also “consider relinquishing its controlling interest in the context of such a transaction” — a new detail in the media melodrama.
A rep from CBS shot back, “Today’s reactive complaint from NAI was not unexpected. The amended complaint filed last week by CBS and its Special Committee details the ways in which NAI misused its power to the detriment of CBS shareholders, and was submitted after careful deliberation by all involved. We continue to believe firmly in our position.”
An NAI spokeswoman countered that Tuesday’s filing “makes clear there was no ‘threat’ or ‘interference,’ and indeed there was no action that could possibly warrant the CBS directors’ unprecedented, unjustified, and unlawful efforts to unilaterally dilute NAI’s voting rights.”
There’s no hiding the bad blood between Redstone and Moonves, who at one time had a decent working relationship.
“Mr. Moonves apparently gave the director defendants an ultimatum: Either you remove NAI’s voting control, or I resign,” the suit said. “This ultimatum came against the backdrop of a $180 million ‘golden parachute’ in Mr. Moonves’s employment agreement that had been adopted without discussion or approval of the full board, with the intended purpose of entrenching Mr. Moonves in his position as CEO.”
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