Paramount Global rejects at the last minute

Updated With statement from the Paramount Global Special Committee

Here comes a plot twist: As a Skydance Media and Redbird Capital Partners work to close Larry Ellison-supported takeover of Paramount Global in the spring, is a consortium of investors who previously offered the large media conglomerate, an ellevi-hour offer of 13, $ 5 billion.

Black has received a legal letter sent to the Paramount’s Board of Directors on Friday, January 24, from Project Rise Partners, outlining a new bid higher than an all-contact offering the consortium made during the go-shop window . The group says its terms are very superior to $ 8 billion from Skydance and Redbird.

In a statement issued on Monday, the Special Committee of Paramount Global’s Board of Directors, which has monitored the sales process, repeated that “Paramount is bound by its agreement with Skydance Media” and will not engage in Project Rise Partners.

“The Transaction Agreement between Paramount and Skydance Media enabled the special committee to pursue a superior proposal during the now exposed 45-day go-shop period, where representatives of the special committee contacted more than 50 third parties to decide on whether They had an interest in making a proposal to acquire paramount, ”the committee said. “Project Rise Partners did not make a proposal for such a period, nor in the previous seven-month sales process for Paramount. It is unclear what the PRP’s goal is; However, Paramount is bound by its agreement with Skydance Media and there will be no commitment to PRP in violation of such an agreement. “

Project Rise Partners Letter, prepared by the law firm Baker & Hostetler, notes that in the light of “The market’s negative reaction to Skydance transaction, PRP now increases its offer as follows: The offer for the B shares is $ 19 per year. Share compared compared to $ 15 per Share in the Skydance offer – a 75% premium and 27% more than shooting. The PRP offer for the A shares remains the same as the Skydance offer. PRP adds $ 2B to the balance. This is an offer on all-contents with committed financing from credible investors. “

These investors have been largely mysterious outside Daphna Edwards Ziman, president and co-chair of film and lifestyle TV network Cinémoi, and Moses Gross, founder and CEO of real estate company Anm Group. (Gross is the CEO of Malka Equities, the umbrella company that signed an obligation of 10 billion men in the world and as well as a corporate partner who is a pioneer in the satellite industry. Ziman and Gross fronted the previous offer, as they say, were never presented for the Board of Directors.

A listed company is typically legally required to consider any legitimate offer of value that may benefit shareholders. The Rise Investors project fired from a legal letter in October 2024, claiming that Paramount’s special committee violated his confidence obligation to shareholders by neglecting the group’s earlier $ 8.5 billion bids for the company. Project Rise Partners’ $ 13.5 billion offer includes $ 5 billion to the debt restructuring.

According to A SEC archivingA member of Paramount’s Special Committee held a call with a Project Rise Partners representative on August 15, who was in the Go-Shop window. (This window closed on August 21) But the SEC archiving says the two sides did not discuss conditions during the call and that the group’s acquisition proposals were only presented on August 26 after the window closed.

Baker & Hostetler -The letter -addressed to members of the Paramount Board Shari Redstone, Barbara Byrne, Linda Griego, Judith Mchale and Susan Schuman -indicates that the company’s Class B shareholders “would own 50% of equity against 30% in the Skydance offer. The PRP offer includes an independent board and normal business management. The board committees, which Skydance plans to eliminate, would be preserved. B shareholders would receive a vote for the first time in the company’s history. “

Project Rise Partners also claims that it plans to grow Paramount Global’s staff number, while the Skydece and Redbird partners have stated that several cuts would come under a shooting paramount fusion.

Larry Ellison, also one of the richest men in the world, faces legislative obstacles with the most important shooting fusion that would see his son, Skydance CEO David Ellison, who runs the overall media assets. President Donald Trump’s new FCC chairman Brendan Carr has publicly raised concerns about the merger. The oldest Ellison, founder of Oracle, who has a net worth of more than $ 200 billion, has been a long -standing supporter of Trumps and has recorded his relationship with the president. He traveled to the White House on Tuesday to announce a separate AI Stargate deal, which industry observers saw as part of an effort to keep the most important shooting fusion on track. It caused Elon Musk to mock Ellison on X and wrote, “They don’t actually have the money” and have “well under $ 10B secured.” Separately, Trump has indicated that he would be open to Larry Ellison or Musk buying Tiktok.

Skydance-Redbird $ 8 billion Agree to merge with paramount has been controversial among shareholders, primarily because it appreciates Skydance of approx. $ 4 billion. The new project increase partners ask questions for valuation. “Skydance reported $ 25 million. In EBITDA in 2023, and Paramount bought Skydance for $ 4.75B or approx. 200x subsequent earnings, ”says the January 24th. “There are no marketplaces that justify Skydance value and no independent bid would pay this price.”

Meanwhile, politicians like rep. John Moolaar (R-Mich.), President of House China Select Committee, raised concern about China’s role in the Skydance Agreement because Tenent, a company with ties to the Chinese military, will have a small share in the media giant whose assets include everything From CBS News to Paramount Film and TV Studio.

“The board of directors and its advisers seemed so eager to end a transaction with Skydance, no one appears to have fully accounted for Skydance’s foreign ownership,” says Project Rise Partners Letter. “The Pentagon recently placed Tencent on a list of companies alleged to help the Chinese military. Authorities will investigate the proposed transaction in view of the increased concern over Chinese control of consumer platforms and access to personal data. If the board of directors and its advisers missed or ignored such a serious red flag, the shareholders will of course question the board’s due diligence. By extension, ineffective care may explain the unreasonable valuation paid for Skydance and the company acquires paramount. “

Paramount and Redstone, whose National Amusements Inc. Is the controlling shareholder in Paramount, has a binding deal with Skydance Media and can only be able to settle back if regulators stop the merger. A source familiar with the process says it is very unlikely. But the Baker & Hostetler letter claims that the Paramount Board removed an opportunity to consider superior bids from its sales process.

“In the public business context, most merger agreements include standard insurance that allows a new bidder with a superior offer to pay the division fee to compensate the original bidder for opportunities and other costs,” the letter says. “For unknown reasons, the Board of Directors or its legal adviser specifically excluded a trust insurance that harms B shareholders and distributes Skydance. … Fiduciary Outs enables boards to terminate a transaction agreement if a superior offer arrives before the agreement is approved by shareholders and closed. If the agreement omits such an exit clause, the board’s decision can be considered ‘exclusively and compulsory.’ There is no significant justification for the unnecessary one -way value transfer to the shooting dance. These ‘agreement protection units’ do not protect shareholders. ‘

The letter also emphasizes that paramount directors have a duty of loyalty to shareholders, not to advisers or shooting.

“Due to the board’s decision to eliminate Fiduciary Out, the big $ 400 million distributes. Split fee for parachute substances in the event of a regulatory block, but is not beneficial to the B shareholders if there is a superior offer. After the canvassing market for over nine months, the board concluded that Skydance was the only actionable, fully financed offer, ”the letter continues. “Paramount directors violated their loyalty obligation by creating a merger agreement that is favorable to the buyer and not the seller in this transaction.