A Delaware judge declined to order an immediate halt to Skydance‘s proposed acquisition of Paramount Global, but has set an expedited schedule for considering a shareholder lawsuit to force the consideration of a rival bid.
Kathaleen St. Jude McCormick, chancellor in the Court of Chancery, today declined to issue a temporary restraining order, which would have sidelined the merger.
The New York City Employees’ Retirement System, the New York City Fire Department Pension Fund, the New York City Police Pension Fund, the New York City Board of Education Retirement System and the
Teachers’ Retirement System of the City of New York filed a lawsuit after a Paramount special committee declined to engage in talks to consider a a higher offer from Project Rise Partners. The latter had submitted an all-cash offer in a transaction values at more than $5 billion above the Skydance-Paramount transaction, the judge noted.
McCormick granted a motion to expedite the proceedings, even though it’s unclear when the Skydance-Paramount will get the regulatory greenlight. The FCC is on day 111 of a 180-day “shot clock” for agency review, although that timeline is not set in stone.
The judge did not rule on the merits of the claim, but found that the lawsuit was a “non-frivolous cause of action.” McCormick also wrote that the plaintiff pension funds had “met the low bar sufficient for expedition.”
McCormick wrote, “Plaintiffs have also demonstrated irreparable harm absent expedition. If the Merger closes before Plaintiffs’ claims are heard, they face being ‘deprived forever of the opportunity to receive a . . . topping bid in a process free of taint from . . . improper activities’ and motivations. The potential loss of this unique opportunity is enough.”
Read the Skydance-Paramount ruling.
The transaction is scheduled to close on March 20, but the parties can extend the end date twice by 90 days if they have not received FCC approval, the judge noted. Last week, Paramount said that it expected the merger to be completed in the first half of the year.
