Paramount Pictures, a major Hollywood studio, is embroiled in a multifront battle amid a political firestorm sparked by President Donald Trump’s efforts to consolidate control over the press. The merger between Paramount and Skydance, valued at $8 billion, has raised concerns among minority investors who suspect that Redstone enriched herself at their expense.
The Delaware Chancery Court recently issued an order directing Paramount to open its books to a pension fund considering litigation against the company over the sale. A sealed lawsuit alleges breach of fiduciary duty and asks for expedited proceedings to fast-track a trial.
Shari Redstone’s unique control over Paramount lies in her unorthodox ownership structure, which gives her power to oversee operations while maintaining a ten percent equity stake. The sale of National Amusements, Redstone’s holding company, to Skydance will turn on the completion of the merger between Paramount and Skydance.
Concerns from minority investors relate to whether the deal could dilute existing shareholders by forcing them to finance the investment in Skydance and undervalue Paramount. Others revolve around allegations that the board failed to seriously consider better offers, including a reported $26 billion all-cash offer from Apollo Global and Sony Pictures.
The FCC is also weighing in on the merger, with Commissioner Brendan Carr asserting his authority over parts of the deal by leveraging the agency’s control over broadcast licenses. Trump has called for Paramount to lose its broadcast license amid allegations that CBS-owned WCBS in New York engaged in “significant and intentional news distortion.”
As the battle plays out, there are murmurs that Redstone may elect to settle Trump’s lawsuit over the 60 Minutes interview in what would be a stunning concession by among the biggest media companies to the president.
Source: https://www.hollywoodreporter.com/business/business-news/paramount-faces-mounting-legal-obstacles-skydance-merger-1236130040