Paramount Global's Sale to Skydance Media Faces Legal Obstacle in Delaware

A Delaware judge may block Paramount Global's sale to Skydance Media. The deal is under review due to concerns over the company's financial reporting and lack of transparency. The judge is considering whether to allow the sale to proceed, citing potential legal issues and potential harm to shareholders. The outcome of the review remains uncertain.

Paramount Global's proposed $8 billion sale to Skydance Media faces a potential roadblock as a Delaware judge considers allegations that the deal undervalues the company and harms public shareholders [1]. The judge, Chancellor Kathaleen McCormick, has not yet issued a temporary restraining order to block the sale but has expedited a class action lawsuit filed by pension funds representing Paramount shareholders.

The lawsuit alleges that Paramount's special committee breached its fiduciary duties by not considering a competing bid from Project Rise Partners, valued at $13.5 billion. The committee, however, rejected this offer and instead opted for the sale to Skydance. The pension funds argue that the sale undervalues Paramount and that shareholders deserve a better deal.

Paramount and Skydance are currently awaiting regulatory approval for the deal to close. The companies have until August 21, 2025, to complete the transaction, with Paramount paying Skydance a $400 million break-up fee if it chooses another suitor.

The judge's decision to consider the allegations comes amidst concerns over Paramount's financial reporting and lack of transparency. In July 2024, Paramount's controlling shareholder, Shari Redstone, struck a two-step deal to sell her stake in the Hollywood studio to Skydance, a streaming-era upstart. The deal, however, has raised eyebrows due to the perceived undervaluation of Paramount's assets and the potential harm to public shareholders.

Paramount and Skydance have not yet responded to requests for comment on the matter. The outcome of the judge's review remains uncertain, but it could have significant implications for the future of Paramount and its shareholders.

[1] Hals, T. (2025, March 6). Judge may consider blocking Paramount-Skydance deal. Reuters. https://money.usnews.com/investing/news/articles/2025-03-06/judge-may-consider-blocking-paramount-skydance-deal