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Paramount Global Investor Sues to Block Skydance Media Merger

By  |  July 25, 2024
Paramount

A Paramount Global investor has filed a lawsuit to halt the media giant’s impending merger with Skydance Media, alleging the deal would inflict a $1.65 billion loss on shareholders. The lawsuit, submitted by Scott Baker in Delaware’s Chancery Court on Wednesday, challenges the fairness of the merger, claiming it disproportionately benefits media mogul Shari Redstone and her controlling entity, National Amusements Inc (NAI).

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    According to Reuters, Skydance Media, led by David Ellison, secured the deal to acquire Paramount earlier in July, culminating months of speculation regarding the future of the storied Hollywood studio. The lawsuit asserts that the Skydance merger’s primary objective is to allow Redstone to liquidate her investment in Paramount at a significant premium, to the detriment of other stockholders.

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    “That payout is only worth $12.23 per Paramount Class B share. Thus, when the merger closes, the non-NAI Class B shareholders will suffer $1.65 billion in damages,” the lawsuit states. Baker contends that this arrangement is unjust, as it offers a substantial payout to Redstone while leaving other Class B shareholders with considerably less.

    Read more: Warner Bros Discovery and Paramount Global Face Mounting Concerns Over Proposed Merger

    The complaint echoes past investor grievances, notably referencing the controversial CBS-Viacom merger in 2019, which resulted in the formation of Paramount Global. That deal also faced legal challenges from investors who accused Redstone of unduly influencing CBS into an inequitable merger.

    The current lawsuit underscores the discontent among Paramount’s Class B stockholders, who feel sidelined by a deal they perceive as skewed in favor of Redstone and NAI. The merger has been marked by significant executive turnover and competitive bids, suggesting turbulent negotiations behind the scenes.

    As the lawsuit progresses, it may spur additional legal actions from other investors seeking to challenge the merger. The outcome could have significant implications for Paramount Global and its stakeholders, potentially reshaping the landscape of Hollywood’s corporate structure.

    Source: Reuters