Fighting the merge, CBS talks with Redstone

With the clock ticking down toward an Oct. 3 trial, CBS and its controlling shareholder are holding talks over which entity will control the media giant.

CBS, led by Les Moonves, sued Shari Redstone’s National Amusements Inc. in May, seeking to enforce a move that would dilute NAI’s grip on CBS to 17 percent from 79 percent.

At the same time, Moonves, as part of a long-simmering feud with Redstone, is seeking to put the kibosh on NAI’s attempt to merge CBS with Viacom.

NAI also controls 79 percent of Viacom’s voting power.

A settlement could be drawn up that would have CBS agreeing to NAI’s continued control and Redstone’s holding company agreeing not to push a merger with Viacom, sources familiar with the situation said.

Muddying the waters is the fate of Moonves. The CEO is under investigation by two law firms for alleged sexual harassment.

Moonves, in a story in The New Yorker, was accused by several women of sexual harassment. He has denied the allegations but apologized for behavior that made the women uncomfortable.

The allegations against Moonves are not part of the settlement discussions, according to Deadline.com, which first reported on the talks.

Both CBS and NAI declined to comment.

The law firms probing the allegations against Moonves will report their findings to a subcommittee of the CBS board.

CBS shares gained 36 cents on Wednesday, to $52.95 — and added another 35 cents in after-hours trading. Viacom shares rose 5 cents, to $29.44 — before shedding 43 cents after hours.