Skydance Media has accused Paramount Global’s special board committee of violating the terms of the deal by extending the period during which it could negotiate with other bidders, The Wall Street Journal reported Thursday.
This comes after veteran media executive Edgar Bronfman Jr. made a favorable takeover bid for Paramount in exchange for $6 billion for the company’s controlling shareholder, National Amusements, and a minority stake in Paramount.
Bronfman’s competing proposal threatens to undermine a takeover plan by tech magnate David Ellison and his independent studio, Skydance Media.
Shares of Paramount, which owns Paramount Pictures, the CBS broadcast network and cable networks such as MTV, fell 1.7 percent in after-hours trading.
“Skydance is not currently exercising its right to terminate the transaction, but reserves the right to do so in the future,” Skydance’s lawyers reportedly said in the letter.
Spokespeople for Paramount’s special committee and Mr. Bronfman declined to comment. A spokesman for Skydance Media couldn’t immediately be reached.
Paramount said Wednesday that a special board committee had extended the deadline for Bronfman’s consortium’s “go-shop” period from Aug. 21 to Sept. 5.
If Paramount, controlled by Shari Redstone’s family company, accepts the offer that Skydance won’t match, the media conglomerate would have to pay $400 million in termination fees.
