Less than a week after Paramount’s board approved a merger with Skydance, a top shareholder is exploring a lawsuit regarding National Amusements head Shari Redstone’s payout.
Chairman of GAMCO Investors Inc. Mario Gabelli filed a books and records request in Delaware on Friday regarding just how much Redstone will receive for her A shares, TheWrap has learned. (While not technically a lawsuit in itself, the move could be an early indicator of one to come.)
National Amusements owns 77% of Class A voting stock and 5.2% of Class B voting stock. Gabelli is the largest A shareholder behind Redstone, with GAMCO Investors Inc. representing clients that own 5 million Class A shares and 1 million Class B shares.
“I want my clients to have the option of continuing to own the voting shares. Why should they get squeezed out? That is not clear,” Gabelli told TheWrap earlier this week. “Secondly, are they worried I would discover a whole bunch of numbers that would indicate that they should get more money because the other guy got more money? I don’t know.”
The records request echoes a similar move made by fellow shareholders the Employees’ Retirement System of Rhode Island in May. The pension fund previously expressed concern over the Paramount board not preventing “Shari Redstone from diverting corporate opportunities or interfering with Paramount’s ability to seek the best deal for Paramount and its other stockholders.”
On Sunday, David Ellison’s Skydance Media announced it had an $8 billion deal in place to acquire Paramount Global. Ellison’s father, Oracle cofounder Larry Ellison, who is the fifth richest person in the world, is investing $6 billion of that total, while RedBird Capital funds the rest.
The deal, which is expected to close in the third quarter of 2025 subject to regulatory approval and other customary closing conditions, includes $2.4 billion for National Amusements, comprised of $1.75 billion for the equity and the assumption of $650 million in debt. Additionally, non-NAI shareholders will receive $4.5 billion and $1.5 billion in new capital will be used to pay down Paramount’s $14.6 billion in long-term debt, recapitalizing its balance sheet.
Class A shareholders can elect to receive $23 cash per share or 1.5333 shares of Class B stock of new Paramount. Meanwhile, Class B shareholders can elect to receive $15 per share or one share of Class B stock of new Paramount, which is subject to proration if those elections exceed $4.3 billion in aggregate. If shares are elected over cash, reducing the cash required to under $4.3 billion, the $1.5 billion of cash going to Paramount’s balance sheet could grow up to a cap of $3 billion.
Skydance’s consortium of investors, which includes RedBird Capital Partners and the Ellison family, will control 70% of shares outstanding and have 100% voting ownership in new Paramount, which will remain public. The deal also includes a 45-day go-shop provision, in which Paramount would pay a $400 million breakup fee in the event that the company receives a better offer from another bidder.
“I wanted to take this opportunity to reach out to you directly not only to share the news, but to express my tremendous gratitude to each and every one of you for what we have been able to accomplish together for the past several decades,” Redstone wrote in a memo to Paramount employees following the acquisition. “I want to express my deepest thanks to you for your commitment, hard work and, most importantly, your support of my family and me. Against a challenging industry backdrop and many changes at the company, you have protected Paramount’s assets and delivered for our audiences.”
Paramount did not immediately respond to TheWrap’s request for comment. Puck News was first to report this development.
