Paramount has been largely out of the news lately, with nothing going on behind the scenes amid a messy attempt to sell itself for years before settling on a merger with Skydance Media. isn’t it.
As is already known, Paramount owner Shari Redstone is in talks with an independent studio headed by David Ellison, producer of “Top Gun: Maverick” and son of Oracle co-founder Larry Ellison. He withdrew a hefty salary of nearly $2 billion before agreeing to the deal.
What is less well known is the level of anger that this complex deal has generated among other shareholders who feel they have hardened in the process. Generational wealth was transferred to the ruling Redstone family. Other shareholders got relatively pennies on the dollar.
Charlie Gasparino has his finger on the pulse where business, politics, and finance meet
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One of the major shareholders, the notoriously difficult money manager Mario Gabelli, told me that his representatives are taking what they believe to be decisive steps to set things right.
They continue to meet with major law firms in what can best be described as early-stage negotiations to sue the newly combined company and extract significant fees for their clients.
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Most own the same dominant “Class A” stock as Redstone, but many also own “Class B” or non-voting common stock. He worries it’s all being treated like a car crash as a result of a deal worth about $28 billion with Paramount, one of the world’s most storied media franchises.
Mr. Gabelli’s representatives are trying to get things right among shareholders regarding the Paramount-Skydance deal. victoria will
Gabelli is no fool. He’s been successfully managing money for longer than 41-year-old David Ellison has been alive. He is one of the last blue-chip investors to thoroughly research companies to extract the highest possible returns for his clients.
Since speculation began at least two years ago that Shari might need to sell a “controlling” stake in the media company founded by her late father, Sumner Redstone, Shari has lost dividends from Paramount Investments. I was aiming. It is slowly evaporating amidst the collapse of the traditional media business.
Wait with excitement
“I’ve come to the point where I don’t want to back down, so I’ve come to the point where I don’t want to give up. . . I can’t wait any longer,” he told me, growing more agitated as we spoke. “We are consulting with law firms, but one of the challenges is finding a consistent law firm because there are so many law firms that work for Paramount.”
I’ve known Mario for a long time, and an excited Gabelli is the last thing Skydance needs as it tries to save a moribund media empire that includes Paramount Studios, CBS, and MTV.
Paramount Global won’t officially be in the hands of Skydance until sometime next year, but Gabelli says other than offering very rudimentary deal terms, disclosures, especially regarding Chari’s full payment, have stalled. says.
So does that mean he’s definitely suing?
Paramount owner Shari Redstone withdrew nearly $2 billion in salary before agreeing to the deal. Getty Images
Gabelli keeps those cards nearby. His company filed what is known as a “220” notice with the court to obtain Shari information. At least one shareholder lawsuit has been filed without a 220 dance.
He believes that taking the 220 route rather than just applying will provide permanent protection from immediate dismissal.
The Delaware Court of Chancery, where such disputes are litigated, would frown upon filing without discovery. He is also eyeing the role of being named by the court as the largest shareholder plaintiff.
Skydance will tell you the deal is not as one-sided as Gabelli suggests. Over the past five years, with cord-cutting and movie audiences declining, Paramount has become more of an operator.
The company’s foray into streaming was a costly fiasco. The company’s stock lost tens of billions of dollars in market capitalization. The company is barely making a profit and is just cutting costs and staff.
That’s why this all-out deal has been on and off for months, with rival bidders pulling out, and still not completely over.
Indeed, there weren’t many real bidders, except for Ellison, who had the funds to meet Shari’s financial demands (about $2 billion plus other perks) and to try to solve the problem (media It should tell you something about business). It was an asset that had deteriorated significantly.
Being the son of Larry Ellison, one of the richest men in the world, gives you that luxury.
And his people remind us that they are actually paying for this.
David Ellison and his partners at Redbird Capital argue, and I find convincing, that they have done a lot in long negotiations to make people like Gabelli happy. I believe.
harsh media environment
Class B Commons could sell some of Paramount’s shares, which plummeted after Edgar Bronfman Jr.’s sudden withdrawal from a bidding war, for $15, a premium compared to the current price of about $10. be.
Controlling Class A stockholders will receive $23 or the opportunity to convert their shares into Class B common stock. All shareholders have the opportunity to participate in the rally as Skydance puts money into a new and improved company.
Rich Greenfield, a media analyst at Lightshed Ventures who has been covering Paramount’s takeover from the beginning, said that in addition to improved terms, shareholders like Gabelli have been forced to deal with the media, including a volatile business and a depressed stock price. We argue that we need to consider the environment. Disney and Warner Bros. Discovery.
“Without this deal, Paramount’s stock price would have been $5, so I wish them the best of luck with the lawsuit,” Greenfield said in an interview. “Given the alternatives and how negative investors are about this sector, this seems like a winner for investors.”
