A Delaware judge determined that a $8 billion merger with Paramount Global's Skydance Media could move forward, but left the door open for rival bids at the last minute, where insiders could derail the deal.
Cataline McCormick, the Supreme Court of Delaware Premier Court, rejected the New York City pension fund request and thwarted a temporary restraining order to launch a bid war between Skydance and an investor consortium called Project Rise Partners.
The judge gave the pension fund permission to carry out the discoveries in the case, renew their motion and block the transaction.
She also ordered the Paramount board to give the fund advance notice of the deadline of “optimally more than five business days.”
The transaction is expected to close immediately on March 20th.
According to Bloomberg, McCormick said, “The claim of the shade that Redstone violated the fiduciary duties to Paramount shareholders is faded. “It is also a claim of the shade that the Skydance Party intentionally took part in these violations.”
Legally speaking, a fading claim means a reasonable claim.
“It's not a bad outcome for Skydance,” the source said, adding that it takes time to review all the materials before making a decision. “The judge wants a locked, loaded deal. She's a thorough judge.”
Still, the ruling gives the plaintiff time to construct a case in which Project Rise Partners, and perhaps other suitors, can present competing proposals to the Paramount Special Committee.
Plaintiffs can also summon whistleblowers and summon minutes of meetings held by the Paramount Special Committee, which is negotiating.
Meanwhile, the Federal Communications Commission is investigating allegations of political bias in Paramount's CBS News in an “60-minute” interview with former vice president Kamala Harris.
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.
Judge McCormick would need to be comfortable that there had been a reliable alternative bid before actually blocking the $8 billion Skydance and Paramount merger.
Earlier last month, the New York City Public Pension Fund was sued to block the SkyDance merger agreement. Its monopoly conditions prevented Paramount from considering bidding from rivals, including a higher $8.8 billion offer from consortium project Rise.
Paramount Board is said to have not seriously considered bidding for Project Rise during the auction process.
“The plaintiffs put zero effort at the hearing to defend the credibility of the project's upward trend. It's not a word about that,” a source close to the case said.
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.
Last year, Judge McCormick is famous for bashing Elon Musk's $56 billion salary package from Tesla's board of directors.
