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Washington (AFP) – CBS Corp lost a court bid Thursday to weaken the control of key shareholder Shari Redstone, potentially clearing the way for a merger of the media group with rival Viacom.

A Delaware judge rejected a petition from the CBS board of directors to block the Redstone family holding company from interfering with its evaluation of any merger deal.

CBS had sought to block any effort by Redstone to meddle with the board ahead of a planned meeting where it was to consider a measure to dilute her voting shares.

“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,” said a statement from National Amusements, the holding company led by Shari Redstone and her ailing 94-year-old father Sumner Redstone.

“The court’s ruling today represents a vindication of National Amusements’ right to protect its interests.”

A CBS statement said the judge did not rule out a potential legal claim against Redstone for failing to act in the interest of shareholders.

“While we are disappointed that the judge did not grant a (restraining order), 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,” CBS said.

The court fight brought into the open the power struggle between Shari Redstone and CBS chief Les Moonves.

– Future clouded at CBS –

CBS had claimed that Redstone was seeking to force a merger with Viacom — which is also controlled by the family and which was split from CBS in 2006 — on terms that were unfavorable to public CBS shareholders.

The Redstone holding company controls about 10 percent of the equity of CBS but has nearly 80 percent of the voting power through a special share class.

Delaware Chancery Court judge Andre Bouchard said CBS failed to show it would suffer “irreparable” harm if its petition were denied.

“I am not convinced that the harm plaintiffs fear would be irreparable,” Bouchard said in a 17-page opinion.

“To the contrary, the court has extensive power to provide redress if Ms. Redstone takes action(s) inconsistent with the fiduciary obligations owed by a controlling stockholder.”

National Amusements has denied the claim by CBS that it was seeking to force a merger with Viacom.

But the open clash is likely to lead to major shakeup in management of CBS assuming a merger with Viacom.

“Ultimately, we believe it is hard to imagine Moonves having a role in the combined company,” BTIG Research analyst Richard Greenfield said in a note to clients this week.

“We have a hard time seeing how any of the independent CBS directors in addition to Moonves, can be allowed to stay, given they are actively seeking to violate National Amusement’s shareholder rights under the CBS bylaws.”

CBS divisions range from the most-watched US television network, to Network Ten Australia, Showtime Networks and the publisher Simon & Schuster, among others.

The lawsuit is the latest drama involving the media-entertainment empire built by Sumner Redstone, whose fitness and mental status have been questioned in legal proceedings.

In a separate legal clash in 2016, Shari Redstone was accused of manipulating her incapacitated father to gain control of the media empire.

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