New York City’s pension funds have issued a subpoena for billionaire media mogul Edgar Bronfman Jr. to testify in their lawsuit to block the Skydance-Paramount merger, according to two sources close to the situation.
The pensions hope the former Warner Music CEO and current FuboTV executive chairman can shed light on whether Project Rise Partners has submitted a legitimate bid to challenge Skydance’s $8 billion deal to merge with Paramount, a source with direct knowledge of the case said.
Daphna Ziman is leading the Project Rise bid, which it values at $8.8 billion not including the assumption of nearly $5 billion in debt. Bronfman has a stake in Ziman’s Cinemoi, a bankrupt cable network focused on fashion and film, according to Skydance.
The pensions — representing public service workers and overseen by NYC mayoral candidate Brad Lander — sent the subpoena to the 69-year-old Bronfman this week. He will be ordered by the Delaware Chancery Court, which has been handling the case, to answer questions in the next week or so, sources said.
“They want to know if PRP’s financing is legit,” a source said.
In a letter filed in court earlier this month, Skydance called out Project Rise for allegedly attempting to derail the merger, claiming it has uncovered proof of “fraud” and “misrepresentation” in the competing offer.
Skydance also raised the possibility that Bronfman, who made his own late attempt to buy Paramount only to withdraw it in August, could be behind Project Rise’s bid. If so, the Paramount board already considered his offer and does not need to again, they argued.
“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.”
Ziman and Bronfman declined to comment.
Initially, the NYC pensions were asking the court for a restraining order to block the merger. They have since withdrawn that request, but are considering refiling for an injunction if Bronfman verifies that Project Rise’s bid was legitimate, a source said.
If Bronfman fails to give evidence that PRP has adequate financing in place, the pensions will likely wait to see if the long-stalled merger with David Ellison’s Skydance finally goes through — and then sue the newly-formed company for allegedly underpaying investors other than controlling shareholder Shari Redstone, the source said.
The FCC has held up signing off on the Paramount merger while the agency investigates allegations of biased editing of an interview with Democratic presidential candidate Kamala Harris by CBS’ “60 Minutes” ahead of the November election.
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