Paramount Global investors have filed a lawsuit to block the merger with Skydance Media, arguing it would cost shareholders $1.65 billion, according to a lawsuit filed Wednesday in Delaware Chancery Court.
David Ellison’s Skydance Media closed on a deal to buy Paramount in early July, ending months of discussion and speculation about the future of one of Hollywood’s oldest studios.
The lawsuit, filed by Scott Baker, alleges that the merger’s primary purpose was to cash out media mogul Shari Redstone’s investment in Paramount at a significant premium while other shareholders would receive significantly lower dividends.
“This payment amounts to just $12.23 per Paramount Class B share. Thus, upon consummation of the merger, Class B shareholders other than NAI will suffer losses of $1.65 billion,” the complaint states.
The plaintiffs argued that the merger was unfair and detrimental to Paramount’s Class B stockholders and that they would not receive a fair share of the profits compared to Redstone and National Amusements, which held controlling shares in Paramount.
NAI and Paramount Global did not immediately respond to requests for comment.
The lawsuit said the deal was “history repeating itself,” referencing the 2019 merger of CBS and Viacom that created Paramount Global. That deal prompted lawsuits from investors who claimed Redstone pressured CBS into an unfair merger.
The lawsuit filed Wednesday could lead to further litigation by investors over the merger, which has been marked by management changes and competing bids.
Reuters reported earlier this month that billionaire investor Mario Gabelli’s investment firm was seeking more details about National Amusements’ asset valuation, suggesting the company may challenge the deal.
