Skydance Media is urging Paramount Global to stop considering a proposal by an investor group led by Edgar Bronfman Jr. to buy control of the company, threatening to withdraw its own offer unless it does.
In a letter from its lawyers on Thursday, Skydance told Paramount it had breached the terms of a merger agreement the two companies announced last month. The deal includes a “go-shop” provision allowing the committee of Paramount’s board of directors formed to steer the M&A process to pursue a “superior” offer. It did so by entertaining the Bronfman-led bid and then extending the go-shop by 15 days, through September 15.
Skydance contends that Bronfman’s bid, which would see him along with nearly two dozen backers put in about $6 billion, is inherently not superior to Skydance’s proposal. The David Ellison-run Skydance plans to invest $8 billion and fully merge the two companies, bringing animation, film and TV production and other assets to the newly combined entity. Bronfman, meanwhile, would acquire National Amusements Inc., which has a controlling stake in Paramount, and then take a minority interest in Paramount Global. That structure, Skydance believes, offers no opportunity for cost savings or efficiencies, making it an inferior scenario.
The Wall Street Journal first reported the legal salvo. Multiple sources familiar with the merger discussions confirmed details of the communiqué to Deadline.
Reps for the special committee and Skydance did not return calls for comment. A rep for Bronfman declined to comment.
“While Skydance is not currently exercising its right to terminate the Transaction Agreement, we reserve the right to do so in the future,” Skydance’s attorneys wrote.
“is significantly less favorable to the Paramount stockholders from a financial point of view,” the letter said, noting that offers a much smaller buyout of non-voting, Class B shares. Since the merger discussions began late last year, the result of a deal for Class B shareholders has been a point of contention, with the threat of shareholder lawsuits forcing multiple revisions of Skydance’s bid. Ironically, having apparently quelled those legal threats, the company has now opened up a potential new arena of legal conflict.
