A Paramount Global investor slammed Shari Redstone over her deal to sell the company to Skydance Media, claiming the heiress is attempting to enrich herself at the expense of regular shareholders.
In a Monday letter, Matrix Asset Advisors pleaded with Paramount’s board to reject Skydance’s bid to merge with the media giant, calling it “detrimental” to the company’s value, and demanding that it reconsider a $26 billion bid from private equity firm Apollo Global.
A deal between Paramount and Skydance— which has produced blockbusters like “Mission: Impossible — Dead Reckoning,” “Transformers: Rise of the Beasts” and “Top Gun: Maverick” for Paramount, could see the media conglomerate acquire the independent studio in an all-stock transaction valued at around $5 billion.
Under the terms being discussed, Redstone and her National Amusements, which controls Paramount -owner of Hollywood studio Paramount Pictures, CBS, MTV and Comedy Central — would receive over $2 billion in cash in the first step of the transaction, according to reports.
Matrix, which currently owns 355,445 Paramount shares and has over $1 billion in assets under management, said the “vast majority of shareholders would not receive a similar premium and would be forced to finance a speculative investment in Skydance in a transaction significantly dilutive to shareholder value.”
“Overall, this transaction, as contemplated, would be detrimental to the company’s value and contrary to the Board’s fiduciary duty,” Matrix said, noting that it would be a “home run” for Redstone at the expense of the rest of the company’s non-controlling shareholders.
Matrix added that it is “especially galling” that the board has not seriously considered Apollo’s offer due to reported concerns about deal financing.
Accordingly, Matrix asked the board to give Apollo the same consideration as it is giving Skydance, namely 30 days to perform diligence and confirm financing.
Skydance, owned by David Ellison, son of billionaire Oracle co-founder Larry Ellison, has entered into exclusive merger talks with a panel of independent directors at Paramount.
Paramount, which was formed by the merger of Viacom and CBS in 2019, has seen its stock lose nearly half of its value in the past year. It has a market capitalization of about $8 billion.
“It is unfortunate that Ms. Redstone finds herself in an urgent need to raise cash at a time when Paramount’s stock is at a low ebb. But her unique problem should not penalize the other 90% of the company’s shareholders,” Matrix added.
“Anything short of that would be a breach of your responsibilities as directors of a publicly traded company, would likely invite shareholder lawsuits, and put a permanent shadow over your tenure as directors of Paramount Global,” the letter concluded.
Reps for Paramount, National Amusement and Skydance did not immediately comment.