A Delaware judge on Monday opened the door to the possibility of a new bidding war for Paramount Global, which could block the media giant's $8 billion deal to fuse with Hollywood film studio Skydance Media.
Earlier last month, the New York City Public Pension Fund was sued to block the SkyDance merger agreement. Due to its monopoly, Paramount did not consider the bids of rivals claiming it was worth $8.8 billion from the investment consortium Project Rise Partners.
On Monday, Delaware Premier Cataline McCormick asked the pension fund for details. Sources explained in court proceedings show that they place emphasis on the demand to block the transaction temporarily at least temporarily.
Paramount's lawyers hoped that Judge McCormick, famous for hitting Elon Musk's $56 billion salary package from Tesla's board last year could take control of the bench, dismiss the case and continue the Paramount Skydance deal, sources said.
“If you're delaying your decision, it's bad for those who didn't file a lawsuit,” said a source following the lawsuit. “Paramount probably has a real problem in court.”
Judge McCormick has not yet set a date for the new hearing, the court said Monday.
According to Professor Jill Fish of the University of Pennsylvania School of Business Law, the biggest question for judges is whether the little-known Project Rise partner is a legal suitor.
“The original offer included a letter from the bank Northern Trust verifying its finances,” posted Monday, Daphna Ziman, who heads the project Rise Consortium.
The Paramount Special Committee will not meet the group, she said.
Ziman said Project Rise Partners, which was submitted to a judge, mostly submitted how they arranged funding for the $8.8 billion merger.
New York City pensions claim Skydance is buying media heirs. Shari Redstone's Paramount control control over stocks at a much higher premium than common shareholders, claiming that ordinary shareholders were removed from the process without a vote.
“More brave,” the lawsuit states, “SkyDance has agreed to pay for a central park apartment in Redstone to pay a private jet lease. Most terrible, SkyDance has agreed to indemnify Redstone for breach of the fiduciary obligation claim arising from the proposed merger, and knows well enough that she will face a great personal responsibility to derive so much value from herself.”
The plaintiffs said Monday that they have the most important whistleblowers who can talk about Skydance (the sales process led by David Ellison, son of billionaire Oracle co-founder David Ellison, is not open properly).
The conflict is the latest wrench thrown into a merger that faces heat from the Trump administration, whose Federal Communications Commission is investigating allegations of political bias on CBS News about a “60-minute” interview with former Vice President Kamala Harris.
On Monday, Judge McCormick asked the parties when it was expected that the FCC and its chairman Brendan Kerr would govern the merger. Paramount believes that the early part of the contract signed in July 2024 will be able to clear that the FCC is March 18th.
Charles Gasparino exclusively reported last week that the FCC decision could be dragged through the summer.
Separately, President Trump has joined Paramount in mediation talks over the settlement of his $20 billion lawsuit claiming media bias during the election. The outcome of these mediation consultations could have an impact on the FCC, sources said.
“This could be a death from a thousand cuts,” a source following the situation said.
Apollo Global Management, a private equity powerhouse that had expressed interest in purchasing Paramount last year, has not currently followed the process actively, two sources close to the situation state that it could be the only other logical suitor.
Edgar Bronfman Jr. was given the opportunity to bid last summer. And he retracted his proposal. There are stories that he is still interested and may be looking for new supporters, sources said.
A special committee, represented by law firm Cravath, Swaine & Moore, claimed that shareholders would get worse if Skydance walked away because there were no real alternative bidders, Ziman said.
Cravath did not return the phone.
“I think the judges are weighing and considering how the offer affects shareholders,” Ziman said. “Who was the police officers, firefighters and teachers who voted for President Trump?”
Plaintiffs are New York City fires, police, teachers and the school board pensions.
“Why Trump [if he knew] Do you want Larry Ellison to take money from the pockets of hardworking shareholders? ” she said in the post.
