Skydance’s legal team is fighting back against efforts to derail its pending $8 billion merger with Paramount Global, accusing a rogue rival bidder of trying to “hijack” the regulatory review process.
In a letter filed with the FCC, which is reviewing the transaction, David Ellison‘s company laid out its concerns about Project Rise Partners. The investment group submitted an offer for Paramount after the end of the “go-shop” period last summer, and the mergers partners say they have a binding contract to see the deal through to completion. Lawyers for Skydance also spelled out their findings and objections in letters to opposing counsel in a shareholder lawsuit filed in Delaware Chancery Court.
“Project Rise is seeking to hijack this Commission proceeding to buy time for litigation to proceed in the Delaware Court of Chancery, in an effort to force Paramount’s Board to consider Project Rise’s belated –and unserious – bid to acquire the company,” Skydance’s legal team said. “But its objections here are as untimely as its bid, and it plainly lacks standing to object to the proposed transaction. In any event, Project Rise’s broadsides against the Skydance Consortium and the proposed transaction have no factual support or legal merit.”
Watch on Deadline
A related letter sent by Skydance lawyers to Project Rise legal counsel says “overwhelming evidence” has been gathered, indicating that Project Rise “fraudulently misrepresented itself.” Along with alleged inaccuracies in its offer term sheet, Skydance said it has “uncovered additional facts which suggest PRP’s fraud runs even deeper than these misrepresentations.”
Last week, a Delaware judge declined to order an immediate halt to Skydance‘s proposed acquisition of Paramount Global, but has set an expedited schedule for considering a shareholder lawsuit to force the consideration of a rival bid.
Paramount management last month said the merger is still on track to close before the end of June. Two hurdles have emerged since Donald Trump’s inauguration, however. Trump has filed a $20 billion lawsuit in Texas over the handling by CBS News of an interview with former Vice President Kamala Harris in the runup to last November’s election. Brendan Carr, Trump’s appointee to head the FCC, has also spoken out against CBS News and said the commission would assess whether the Paramount news division could be penalized for ‘news distortion,” a seldom-invoked clause in regulatory policy.
The Delaware shareholder suit was filed by a group of plaintiffs (all New York City pension and retirement funds) after a Paramount special committee declined to engage in talks to consider a higher offer from Project Rise Partners. The latter had submitted an all-cash offer in a transaction valued at more than $5 billion more than the Skydance-Paramount transaction, the judge noted. The proposal was made, however, after the expiration of a “go-shop” window provided for in the original Skydance-Paramount agreement. Many Class B shareholders have decried the notion that Paramount chair and controlling shareholder Shari Redstone and other principals would benefit from the deal, potentially at the expense of many shareholders.
The post Skydance Cites “Overwhelming Evidence” Of Fraud By Late-Arriving Paramount Bidder, Accuses It Of “Hijacking” Merger Review Process appeared first on Deadline.
