As a seasoned investor with decades of experience under my belt, I can’t help but raise an eyebrow at the ongoing saga between Mario Gabelli and Paramount Global. The billionaire money manager is known for his relentless pursuit of justice for minority shareholders, and this latest move against Shari Redstone’s National Amusements and Skydance is no exception.
Wealthy investment strategist, Mario Gabelli, is intensifying his examination of Skydance’s agreement to gain ownership over Paramount Global.
In a petition to the FCC, Gabelli urged the commission not to transfer control of broadcast licenses held by Shari Redstone’s National Amusements to Skydance until he decides whether to sue for breach of fiduciary duty. He claimed Paramount has failed to properly disclose the process leading up to board approval of the merger and the fairness of the deal for investors, who allegedly continue to be deprived of information relating to the possibility that “consideration that should be paid to them is being diverted” to National Amusements for its controlling stake in the company.
The document, submitted on November 8th, points out that the transaction does not require approval from minority stockholders. Instead, they are only provided with non-voting shares following the merger of Paramount. This effectively removes voting rights for Class A shareholders, leaving the management of significant media assets largely unmonitored and unrestricted.
During the merger, Class A shareholders will be given $23 per share, whereas Class B non-voting shareholders will receive $15 per share. Notably, Gabelli, who holds the majority of non-voting shares, is inquiring about whether Redstone, the owner of both voting and non-voting shares, might receive more money for her Class B shares than other shareholders. This inquiry comes as part of an anticipated backlash over the treatment of minority investors. In July, Gabelli filed a lawsuit in Delaware Chancery Court in order to access Paramount’s financial records, which could potentially lead to a lawsuit challenging the deal that some investors believe unfairly advantages Redstone at their expense.
Essentially, Paramount, through its subsidiaries, currently holds broadcasting rights for 28 local TV stations that are part of the CBS Television Network. Applications have been submitted by Skydance and National Amusements for approval to transfer control of these licenses from trusts controlled by Redstone, to companies owned by Larry and David Ellison. If this deal goes through, the Ellisons will hold full ownership over Paramount’s voting interest.
Last week’s submission by Gabelli requested that the FCC hold off on approving any matter until he has made a decision about potentially suing Paramount’s Board of Directors, National Amusements, and Skydance for alleged breach of fiduciary duty. This is based on claims that the deal may be in violation of federal law.
As a gamer, I’d put it like this: “The investigations into possible breaches of trust and securities laws that Gabelli Value is conducting could potentially impact the company significantly and affect current minority shareholders like myself.
Gabelli’s argument in July centers around the suspicion that National Amusements might be negotiating a deal with Skydance, aiming to secure the highest possible price for its controlling stake in Paramount at the expense of public shareholders. They highlighted potential rival bids, such as the one from Allen Media Group, who supposedly put forward an offer worth $14.3 billion for both Class A voting and Class B non-voting shares. Additionally, they mentioned that Apollo Global Management reportedly made two offers totaling $26 billion to acquire Paramount, with the latest being a joint bid with Sony, which included assuming the company’s debt of approximately $14.6 billion.
In my perspective as an enthusiast, Skydance suggested a more intricate deal that supposedly offered maximum return for National Amusement, as mentioned in the lawsuit. There’s reason to believe that the impartiality of the board committee established to assess this transaction could potentially be questionable, according to Gabelli’s assertions.
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2024-11-13 01:24