Skydance reportedly accuses Paramount committee of violating merger deal

By Bill Peters

Skydance says it's reserving the right to terminate its bid, lawyers say in letter, according to WSJ

David Ellison's Skydance Media is firing back at Paramount Global, accusing a special committee at the media and entertainment giant of violating the merger deal the two companies struck last month after Paramount said it would allow more time for talks with another interested buyer, according to a report on Thursday.

The Wall Street Journal reported that Skydance's lawyers, in a letter seen by the news outlet, said the rival bid for Paramount (PARA) - from onetime media executive Edgar Bronfman Jr. - did not amount to a better proposal than Skydance's, as based on the parameters of the deal. Thus, they said, the Paramount committee's move to keep the door open to Bronfman constituted a breach, according to the Journal.

Paramount and the special committee, which has been evaluating offers for Paramount, both declined to comment. Skydance did not immediately respond to a request for comment.

When Skydance and Paramount first agreed to merge last month, the deal included a 45-day "go-shop" period, under which a committee on Paramount's board could still seek out and weigh potentially "superior" deals with others.

That period was set to end on Wednesday. But as that deadline approached, it was extended to Sept. 5 to allow discussions to continue with Bronfman, who earlier this week reportedly raised his offer for Paramount to $6 billion.

The Journal on Thursday said that Skydance accused Paramount of "an incurable, material breach of the transaction agreement" by allowing negotiations with Bronfman to continue. Skydance's lawyers also said the committee should request that any information related to the deal received by Bronfman and others working with him be returned or destroyed.

They also said that the Paramount committee ran afoul of the agreement when they didn't notify Skydance that it would extend a deadline to allow it to keep negotiating with Bronfman, the Journal said.

"While Skydance is not currently exercising its right to terminate the transaction agreement, we reserve the right to do so in the future," Skydance's attorneys said in the letter, according to the Journal. The Journal said the letter was sent on Thursday.

Shares of Paramount fell 1.3% after hours on Thursday, after finishing 0.8% higher during regular trading. The stock is down 24.4% so far this year.

-Bill Peters

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08-22-24 2042ET

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