A Delaware judge declined on Thursday to issue an immediate injunction blocking Skydance Media’s proposed acquisition of Paramount Global, dealing a blow to shareholders pushing for a rival bid but setting the stage for a swift legal showdown. Chancellor Kathaleen St. Jude McCormick of the Court of Chancery denied a temporary restraining order that would have stalled the merger, announced yesterday per a report from Deadline, while granting an expedited schedule to hear a lawsuit from New York City pension funds demanding Paramount consider a higher offer. The ruling keeps the $8 billion deal on track for now, though it leaves the door ajar for potential upheaval.
The lawsuit stems from a group of heavyweight plaintiffs: the New York City Employees’ Retirement System, Fire Department Pension Fund, Police Pension Fund, Board of Education Retirement System, and Teachers’ Retirement System. They allege Paramount’s special committee improperly dismissed a superior all-cash bid from Project Rise Partners, which valued the company at over $5 billion more than Skydance’s offer. Filed after Paramount opted not to negotiate with Project Rise, the suit claims the committee’s decision-making was tainted by “improper activities” and motivations, risking shareholder value. McCormick didn’t rule on the case’s merits but called it a “non-frivolous cause of action,” meeting the “low bar” for expedition.
“Plaintiffs have also demonstrated irreparable harm absent expedition,” McCormick wrote in her decision. “If the Merger closes before their claims are heard, they face being ‘deprived forever of the opportunity to receive a topping bid in a process free of taint.’” She highlighted the potential loss of a “unique opportunity” as justification for fast-tracking the case, even as the merger’s regulatory timeline remains fluid. The Federal Communications Commission (FCC) is currently on day 111 of its 180-day review period, though extensions are possible. The deal, initially slated to close March 20, can be pushed back twice by 90 days if FCC approval lags, with Paramount projecting completion in the first half of 2025.
Skydance’s bid, backed by RedBird Capital and Ellison family funding, aims to merge its production prowess—behind hits like Top Gun: Maverick—with Paramount’s vast library and CBS assets. The pension funds’ challenge reflects broader shareholder unease, amplified by Paramount’s recent struggles, including a $6 billion writedown in 2024. While McCormick’s refusal to halt the merger preserves its momentum, the expedited lawsuit introduces uncertainty, potentially forcing Paramount to justify its rejection of Project Rise’s richer offer.
As the FCC clock ticks and courtroom drama looms, the Skydance-Paramount saga remains on edge for what will happen next.
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