Skydance Media has taken aim at Project Rise Partners in new letters to the FCC arguing that the investor group is “seeking to hijack” the review process of its pending $8 billion merger with Paramount Global after it filed a formal objection with the agency last week.
The David Ellison-owned studio has accused PRP of trying to delay the closing of the transaction to force Paramount’s board to consider its “belated” and “unserious” $13.5 billion bid to acquire the media giant and to buy time for a shareholder lawsuit making its way through the Delaware Court of Chancery from a group of New York City pension funds. It also says that it has uncovered “overwhelming evidence of fraud” in PRP’s bid and that it misrepresented itself in the bidding process and its support of the pension funds’ litigation with regard to its financing and advisor relationships.
The class-action complaint, which was seeking a court order to temporarily block the deal while its claims are being resolved, alleges the media giant failed to sufficiently consider PRP’s offer, which the pension funds say is superior to the Skydance deal. A judge has denied the request for a temporary restraining order, but said it would expedite its review of the lawsuit in order to rule on the case prior to the completion of the FCC’s review.
In its objection, PRP said the Skydance deal raises “serious public interest concerns,” including the risk of perpetuating anticompetitive bundling practices, threats to national security due to a minority stake from China’s Tencent Holdings, undermining national and local broadcast news by increasing retransmission consent prices and the risk of job losses and inaccurate news reporting due to Skydance’s plans to leverage artificial intelligence. It also requested that Skydance turn over various documents related to its plans for Paramount and how it plans to address the concerns.
But Skydance argues that the company lacks standing and that none of its “manufactured concerns about the public interest implications of the Proposed Transaction would impose any cognizable harm on Project Rise or its members.”
“As a legal matter, Project Rise ignores the bedrock rule that the Commission ‘may not consider whether a different buyer would better serve the public interest.’ But even if such a comparison were permitted, it would not be a close call,” Skydance’s lawyers Latham & Watkins wrote on Monday. “Skydance’s fully funded plan will infuse Paramount with additional capital and combine Skydance’s talented, American management team and storytelling prowess with Paramount’s venerated brands. By contrast, Project Rise has advanced an unfunded and unrealistic proposal backed by a leadership team without relevant experience.”
It said that PRP failed to submit a bid during the 45-day go-shop window, has “never demonstrated that it has the necessary financing” and that the group’s lead investors, Cinémoi North America president and CEO Daphna Ziman and Malka Equities CEO Moses Gross “lack the experience and credibility to execute a transaction of this size.”
“Project Rise’s letter represents a bad-faith effort to sully the reputation of the Skydance Consortium and to delay approval of the Proposed Transaction,” Skydance’s letter concluded. “Having failed to submit a timely (or credible) bid to acquire Paramount, Project Rise now resorts to a misuse of the Commission’s process, asserting untimely and frivolous arguments without any demonstration of standing. The Commission should reject its baseless claims and proposed information requests out of hand.”
In a separate letter detailing its allegations of fraud, Skydance noted that PRP’s statements identifying Goldman Sachs as a financial advisor and Aquarian Holdings as a participant in the bid are both false and that it has no formal business relationships or agreements with those entities.
Other entities listed on the term sheet, according to Skydance, include Tava Capital, a “private and alternative investment fund management firm” based in an Ogden, Utah strip mall that has four employees, and the Imperium Blue Group of Companies, which appears to be a small family office out of Atlanta with a single employee.
“Put simply, stripped of the big-name financial players with whom PRP falsely claimed relationships, PRP’s supposed syndicate appears to be a ragtag consortium of small businesses masquerading as a group capable of supporting a multi-billion-dollar cash offer,” Latham & Watkins wrote.
The letter also states that Malka Investment Trust, Funds and Group of Companies are not registered with the U.S. Securities and Exchange Commission, Commodity Futures Trading Commission or Financial Industry Regulatory Authority and that there is “no indication that any of these companies hold any investments outside of a small portfolio of New York rental properties.”
Additionally, Skydance claims that the bid appears to be a “far-fetched scheme” by Ziman to save Cinémoi, which filed for Chapter 11 bankruptcy last year, and is “suspiciously linked” to Edgar Bronfman Jr., who withdrew his own bid in August after some of his co-investors were not comfortable making financial statement disclosures to Paramount’s special committee. It notes that the Bronfman Group and Bronfman’s daughter are listed as equity holders in Cinémoi, and that Ziman has touted having a personal relationship with Bronfman Jr., calling him a “dear friend.”
“That Mr. Bronfman and/or the ‘Bronfman Group’ have personal and economic relationships with PRP’s principal (Ms. Ziman) and syndicate member (Mr. Gross) suggests PRP’s fraudulent bidding may be motivated in part by Mr. Bronfman’s prior failed bid and, at the very least, commands further investigation,” the letter continues.
An individual familiar with the matter told TheWrap that while Bronfman Jr. has spoken to PRP, he is not involved in the group’s bid and has “committed to nothing.”
According to Paramount’s S4 filed with the SEC, PRP expressed an interest Paramount’s special committee evaluating bids about submitting a proposal during the 45-day go-shop period as early as Aug. 15, but did not formally submit anything until Aug. 26 — five days after the go-shop window expired.
“It is unclear what PRP’s objectives are; however, Paramount is bound by its agreement with Skydance Media and there will not be any engagement with PRP in contravention of such agreement,” a spokesperson for the special committee previously told TheWrap.
Representatives for Project Rise Partners did not immediately return TheWrap’s request for comment.
Paramount, whose shares are up 10.8% year-to-date and 17.4% in the past six months, has said the Skydance deal is on track to close in the first half of 2025.
