Paramount merger can continue amidst lawsuit, judge rules
Paramount merger can continue amidst lawsuit, judge rules
A group of New York public employee pension funds were hoping to halt the merger in its tracks, but they did succeed in speeding up the schedule for their case.
Paramount Global and Skydance officials can breathe a little easier this morning. A judge in Maryland Chancery Court has ruled that the merger of the two companies will not be paused while the court considers a lawsuit brought by five New York public employee pension funds. The case will be put on an accelerated timeline, however, as uncertainty still looms regarding the merger’s approval by the FCC.
Key Details:
- The plaintiffs in the suit had been seeking a temporary restraining order to halt the merger process.
- The accelerated pace of the trial is intended to wrap up the case before an April 7 deadline.
- FCC approval of the merger is potentially being held up by political concerns.
Chancellor Kathleen McCormick of Maryland Chancery Court has denied a motion by the plaintiffs for a temporary restraining order that would have halted the merger of Paramount and Skydance until the outcome of their lawsuit had been decided.
However, the judge did approve an accelerated timeline for the trial. As written, the merger agreement between the two has an end date of April 7. Proceeding as though all parties must assume the transaction could be completed by that time, Chancellor McCormick expedited the case so as to finish before then, keeping the window open for the New York pension funds to revive their motion for a restraining order if necessary.
“This is a break-neck pace but doable,” she wrote in her ruling. “Perhaps the parties can negotiate a more civilized schedule in the event they learn that the FCC process is not likely to conclude by April 7.”
The FCC process referred to is the review of the merger by that governmental body, which has essentially come to a halt since the change of presidential administrations. Trump appointee and FCC chairman Brendan Carr said last week that the review hasn’t gone very far, and political considerations emanating from a “60 Minutes” interview on Paramount-owned CBS with Vice President Kamala Harris which the president says was unfairly edited could be slowing up the process.
The April 7 end date of the merger can be extended if the regulatory approval process goes past that date. Meanwhile, Paramount is also dealing with other lawsuits brought by Rhode Island public employee funds, as well as a case brought by mega-investor Mario Gabelli.
The New York pension funds, which own Paramount stock, have brought their suit because they claim Paramount failed in its duty to shareholders by refusing to consider an all-cash offer by a group called Project Rise Partners, which would have paid Class B investors more handsomely than Skydance’s deal. Paramount says that because the offer came in after the agreed-upon period for considering other bids, it did not have a responsibility to consider PRP’s proposal.
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