A Delaware Chancery Court judge hit the pause button on the unfolding drama between CBS and National Amusements Inc., temporarily freezing the broadcaster’s request for a temporary restraining order to block its largest shareholder from ousting its board of directors, according to reports.
Judge Andre Bouchard promised that he would have a decision on the TRO before CBS’s board meeting, scheduled for tomorrow afternoon May 17).
According to Deadline.com, Bouchard said he would take the matter under advisement, adding the TRO would be effective “until I can rule.”
CBS touched off the court battle on Monday (May 14), when it filed suit in the Delaware court seeking a TRO to stop National Amusements from interfering with a special meeting of CBS' board where a vote that would reduce NAI’s voting control of the broadcaster from 80% to 17% was expected. NAI responded in its own court filings on Wednesday (May 16) and minutes before the 2 p.m. hearing in Delaware today changed CBS’s bylaws, requiring a super-majority vote for matters that would affect control.
At the center of the dispute is NAI’s moves to combine CBS with its former corporate sister Viacom, a move the parent seems to believe will address scale issues, but which the CBS board of directrs has unanimously rejected. Several analysts have said the law battle virtually ensures that a CBS-Viacom deal won’t be done.
In a research note Wednesday, Sanford Bernstein media analyst Todd Juenger set the chances for a CBS-Viacom deal at “near-zero,” regardless of the outcome of the suit.
“We believe the outcome of the dilution is unclear, but the outcome of the Viacom deal is settled,” Juenger wrote. “Even if NAI remains in voting control after the dust settles, we don't believe they could replace the independent board members with a new group who would be willing [to] reverse the unanimous decision of their predecessors.”