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Fund Manager Mario Gabellithe largest holder Paramount Global Class A Voting Shares Shari Redstonesaid more information was needed. Skydance deal He needs to get more information than has been publicly disclosed before he can decide whether he’s happy with the terms.
On Friday, Gabelli sent a letter to Paramount requesting records to clarify the $2.4 billion figure. David EllisonThe company and its backers have agreed to buy Redstone’s family holding company, National Amusements, under a merger deal announced a week ago. NAI’s assets include: Paramount GlobalThe deal includes voting stock of National Amusements Inc. (which would give the buyer control of the company), as well as the National Amusements movie theater chain and possibly other assets and investments, the details of which were not disclosed in the deal announcement.
“I don’t know the details of what her compensation for voting rights at Paramount is,” Gabelli told Deadline today.
This matters because the terms of the merger require all Class A shareholders, like Gabelli and his hundreds of clients, to either sell their Class A shares for $23 a share or exchange each Class A share they own for 1.53 Class B non-voting shares.
“I’m not happy or unhappy,” Gabelli told Deadline. “I’m just focused on doing what’s best for my clients as a fiduciary. [Redstone] “If she’s at $40 and I’m at $23, that’s a problem. If she’s at $26 and I’m at $23, $3 a share isn’t a big deal to them. … They’re not going to haggle over $3 a share, OK? They’re going to obviously make a low bid and then have to deal with an individual like me arm-wrestling.”
“In short, tell me what happened. Skydance How much money does she pay to the various parts of National Amusements? … That’s why I want the books and records. I know Shari has invested in venture capital in the past, but I don’t know if that’s another pocket of her money or if it’s part of National Amusements’ money. I have no idea.”
Gabelli has been a long-time investor in Paramount Global and its various businesses, said he intends to be a long-term investor and would hate to have to sell his Class A shares.
“We’re like marathon runners. We want to hold onto our Paramount shares. We don’t want to be forced to give up our shares, as they say… take $23 or take $1.53.” [Class B shares]”I don’t like that. I want to see what she gets, and then we’ll talk about how much she wants to pay me.”
“And that’s something I don’t like either. They’re really trying to remove me from having a say in the next steps of this deal.”
Letters requesting board records and other information are allowed in the Delaware Chancery Court but do not constitute a lawsuit. The corporation must respond within five business days.
“There is a deadline to respond, but they can say, ‘we’re not giving you anything’ and then we’d have to sue them. We’re not prepared for that. So if they come and say, ‘we need a bit more time’ that’s possible. From what I’ve heard today, they may be looking to extend the deadline until the end of July,” he suggested, suggesting that in practical terms it would probably be OK.
Strategically, he’s relatively comfortable with the Paramount-Skydance deal, believing that Skydance’s scale, tech and AI boost will bring a bright future to all kinds of content.
Meanwhile, Class B shareholders, who far outnumber Class A shareholders, are not happy with the deal, which sees them buy out some of their shares for $15 a share. Their complaint is that in the second phase of the deal (after Skydance acquires National Amusements), Paramount will acquire Skydance for only $4.75 billion worth of stock. Issuing new B shares would dilute current shareholders’ holdings, so Paramount shares are trading at $11 to $12 instead of $15. Some shareholders expect long-threatened lawsuits from Class B shareholders to start coming.
Related: Sony won’t get back into the mix during Paramount’s 45-day ‘Go Shop’ period
Skydance’s original deal did not include a buyout for Paramount shareholders other than Redstone, but the offer has been increased several times to get them on board.
The two sides agreed to a “go-shop” clause until August 21st to allow other interested parties to make acquisition offers for Paramount.
