Mario Gabelli, the longtime fund manager who has made noise over the past two years about the terms of the Paramount-Skydance merger, has sued former Paramount controlling shareholder Shari Redstone.
Gabelli, chairman of New York-based Gamco, filed suit in Delaware Chancery Court on Wednesday, seeking class-action status for the complaint. Along with other holders of Class B shares, Gabelli complained that Redstone carved out a sweetheart deal for herself and her family, coming away with $2.4 billion in proceeds from the merger while other common shareholders were left at a disadvantage.
The $8.4 billion transaction closed last Thursday after a tortuous regulatory process. Paramount shares went into orbit Wednesday, for no immediately apparent reason, puzzling many market watchers given the small amount of shares available to the public.
Christopher Marangi, Co-CIO Value, GAMCO Investors, Inc. (OTCQX: GAMI), said, “GAMCO has an obligation to pursue this case on behalf of its clients. GAMCO voiced its concerns early in the process and asked at minimum for more transparency regarding what NAI was receiving for their identical Paramount voting shares. GAMCO also requested, as is customary in these types of control transactions, that the merger be put to a vote of the minority shareholders. These concerns were ignored and, lacking the ability to continue holding voting shares in the new Paramount entity, GAMCO was forced to redeem its shares for cash. We now look to the Courts to rectify the situation.”
