CBS, National Talking To End Bitter Family Feud

CBS Corp. is in talks with Shari Redstone and her family’s holding company, National Amusements Inc., to settle their litigation over control of the broadcaster, less than a month before the matter is scheduled to go to trial, according to The Wall Street Journal citing people familiar with the matter.

A framework for the settlement would include CBS dropping its attempt to strip National Amusements of its voting control of the company by issuing shares as a dividend. In return, National Amusements would refrain from pushing for a merger of CBS and Viacom Inc. for an undisclosed period.

A deal would end a bitter corporate feud that threatens to erupt into an even messier courtroom battle, and go a long way to clarify who will call the shots at CBS at a pivotal moment in the media industry.

The potential settlement under discussion also could lead to a shake-up of CBS’s board and push CBS’s annual meeting—originally scheduled for last May and delayed by the fight—to next spring, the people familiar with the discussions said.

Les Moonves

The fate of CBS Chief Executive Leslie Moonves, who is being investigated by two independent law firms for allegations of sexual harassment reported by the New Yorker, isn’t part of the settlement talks, some of the people said. Mr. Moonves has expressed regret for behavior that made women uncomfortable, but denied retaliating or harming anyone’s career when his advances were rebuffed.

CBS and National Amusements have been locked in litigation in Delaware Chancery Court since May.

CBS and five of its independent board members sued Ms. Redstone, her father, 95-year-old media mogul Sumner Redstone, and National Amusements, seeking to block a merger with Viacom and dilute National Amusements’ voting control from nearly 80% to roughly 20%.

CBS argued that Ms. Redstone had misused her power as controlling shareholder, blocked acquisition approaches from potential suitors such as Verizon Communications Inc. and intended to overhaul the CBS board to push through a merger with Viacom, which National Amusements also controls. Ms. Redstone denied these charges.

National Amusements changed CBS’s bylaws shortly before its board met to vote on the dividend, requiring a 90% super majority to approve such a move. The CBS board voted 11 to 3 for the dividend, short of the new threshold.