The impending merger between Paramount and Skydance has been met with scrutiny from major shareholder Mario Gabelli. Gabelli has been a stakeholder in Paramount and its predecessor companies for many years and is seeking more financial information and clarity regarding the valuation of National Amusements, Inc. This move comes as Skydance and its investors plan an $8 billion two-step transaction, which involves taking control of NAI before merging with Paramount. The deal, valued at $4.75 billion, includes a $2.4 billion cash acquisition of National Amusements and is expected to be finalized in the third quarter of 2025.
Gabelli has taken to Twitter to promote what he calls “Operation Fish Bowl,” an initiative aimed at increasing transparency in the transaction. While Gabelli has not explicitly mentioned taking legal action, reports have surfaced suggesting that he may have made legal overtures to obtain more information. Although a complaint was reportedly submitted in Delaware Chancery Court, there is no public filing available as of yet. Additionally, Gabelli has reached out to Paramount’s general counsel for further details on the merger.
At the core of Gabelli’s concerns lies Paramount’s dual-class stock structure, with Shari Redstone’s NAI holding nearly 80% of the company’s Class A, or voting, shares. This discrepancy has raised fears among Class B shareholders, including Gabelli, that they may be disadvantaged in the event of an acquisition. Gabelli Funds, which owns close to 4.9 million Class-A voting shares in Paramount, is particularly invested in ensuring fair treatment for all shareholders.
Skydance’s revised offer, the latest in a series of proposals, includes a number of incentives to appease Class B shareholders and reduce the likelihood of legal challenges. This includes indemnification measures to protect against potential lawsuits, a key sticking point that led to Redstone walking away from a previous deal in June. Transparency regarding the price paid to NAI for both voting and non-voting shares has been a focal point in Gabelli’s quest for more information.
Gabelli’s efforts echo those of the Employees’ Retirement System of Rhode Island, which filed a similar complaint last May demanding the release of pertinent documents. As the merger between Paramount and Skydance moves forward, the call for transparency and accountability from stakeholders like Gabelli becomes increasingly important. In an industry where M&A deals can have far-reaching implications for shareholders, ensuring that all parties have access to accurate and thorough information is crucial for maintaining trust and integrity in the process.