Legal Battle Ensues as Major Shareholder Challenges Paramount-Skydance Deal

Money | July 13, 2024, 8:43 a.m.

Billionaire money manager Mario Gabelli has filed a lawsuit in Delaware Chancery Court seeking access to Paramount Global's records related to a bid by Skydance to take control of the company. This legal move comes as a revolt by minority investors who believe the potential deal may enrich controlling shareholder Shari Redstone at their expense. The merger would see class A shareholders receiving $23 per share, while class B shareholders would receive $15 per share. Gabelli is particularly interested in whether Redstone, who owns both voting and nonvoting shares, will receive more money for her Class B shares. The lawsuit from Gabelli, the largest holder of nonvoting shares, follows a similar action in April from another investor questioning the company's motives in talks with Skydance. Multiple law firms have also launched investigations into whether the board of directors breached its fiduciary duties to minority investors.