CBS CBS Corp

By Joe Flint 

CBS Corp. is seeking information from AT&T Inc. about conversations it had in 2016 with National Amusements Inc., the controlling shareholder of CBS, about a potential acquisition of the media company, according to a court filing.

A CBS subpoena, filed Tuesday in Delaware Chancery Court, comes as the company is in a legal battle with National Amusements and its president, Shari Redstone, for control of the company.

One of CBS's arguments in trying to strip National Amusements of voting control is that Ms. Redstone has tried to force CBS to merge with embattled sister company Viacom Inc., while passing up opportunities for other deals that would be better for shareholders.

In its filing, CBS requested documents of communications AT&T had with Ms. Redstone relating to "a potential merger, combination, or other strategic transaction" involving CBS, Viacom or a combination with the two.

The subpoena cites a Wall Street Journal article from June that reported AT&T Chief Executive Randall Stephenson met with Ms. Redstone in 2016 and expressed interest in acquiring CBS Corp., before AT&T ultimately set its sights on acquiring Time Warner.

Ms. Redstone told Mr. Stephenson she wasn't interested in a deal, people familiar with the gathering said. She didn't inform the CBS board or Mr. Moonves of the meeting, people close to CBS said.

AT&T, which closed its $81 billion takeover of Time Warner in June, made its 2016 approach to CBS as part of a broader review of media assets and possible deals, the Journal reported. An AT&T spokesman declined to comment.

The government last year sued to block the Time Warner deal on antitrust grounds and is appealing a U.S. District Court decision that cleared the way for AT&T to close the deal.

A spokeswoman for Ms. Redstone referred to a previous statement acknowledging that Ms. Redstone had a "brief introductory meeting" with Mr. Stephenson in 2016 but doesn't recall him expressing any potential interest in acquiring CBS or Viacom.

The Delaware legal fight centers on control of CBS. In May, CBS issued a dividend to shareholders that would dilute National Amusements' voting stake from 80% to about 20%. National Amusements changed its CBS bylaws to block the move by requiring a supermajority of board members to take such an action. Trial is scheduled for this fall.

As the National Amusements-CBS fight continues, Mr. Moonves is separately under investigation by the CBS board over allegations of sexual harassment that surfaced in a recent New Yorker article. The CBS board has retained two law firms to conduct an investigation into Mr. Moonves and the overall culture at CBS.

Mr. Moonves told the New Yorker he regretted any behavior that made women uncomfortable but denied other aspects of the story that suggested he had retaliated professionally against women who rejected his advances.

(END) Dow Jones Newswires

August 07, 2018 18:14 ET (22:14 GMT)

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