Paramount’s Skydance Deal Faces Legal Scrutiny Over Shareholder Concerns
So, here’s the latest on the whole Paramount and Skydance merger drama — and yeah, it’s a lot. The Delaware Court of Chancery is right in the thick of it now, digging into whether Paramount Global acted properly when it struck a deal with Skydance Media, and whether controlling shareholder Shari Redstone may have had too much influence over how that all played out. Investors are seriously questioning whether this deal really benefited the company, or mostly just Redstone herself.
Here’s what’s happening: Money manager Mario Gabelli — his funds own around 12% of Paramount’s voting stock — wanted access to Paramount’s internal records to better understand the Skydance merger. Specifically, there’s suspicion around how Redstone might have steered things in her favor, considering she controls National Amusements Inc. (NAI), which in turn controls Paramount. What Gabelli and other investors are essentially saying is, “Hold on — did Redstone prioritize selling her stake in NAI over striking the best deal for Paramount shareholders?”
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Now, this is where things get legally interesting. Paramount initially refused to share those records, arguing that Gabelli didn’t have a valid reason. But the courts are taking a closer look. The big turning point came when Vice Chancellor J. Travis Laster ruled that the stockholder — in this case, a Rhode Island pension fund — did have a proper reason for wanting the documents. Even more significant? He said that stockholders could use news articles and other information that came out after their initial demand to help build their case. That’s huge.
A lot of the post-demand info came from credible news sources and pointed to things like directors resigning, boardroom tensions, and concerns that the deal didn’t serve all shareholders equally. There were reports of other companies making higher bids for Paramount’s assets — like Apollo Global’s $11 billion offer for Paramount Pictures — but those offers didn’t get much attention, allegedly because Redstone was focused on selling NAI instead.
Eventually, Skydance agreed to a two-step deal: buying NAI for $2.4 billion and then merging with Paramount in a stock deal worth $4.75 billion. But that deal was revised several times, partly due to backlash. At one point, Redstone even considered walking away when the terms were changed in a way that reduced her own payout.
Ultimately, the court said that the stockholders made a credible case to look deeper into whether Redstone breached her fiduciary duty. While the final outcome is still pending — especially since Paramount appealed parts of the ruling — it sends a strong message. Corporate leaders can’t just make backroom deals and expect shareholders to stay quiet, especially when it looks like personal gain might be put ahead of company value.
So yeah, this isn’t just about one merger. It’s about transparency, accountability, and making sure that those in power play fair — even when billions of dollars are on the table.
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