A Delaware judge on Monday opened the door to the possibility of a renewed bidding war for Paramount Global that could thwart the media giant’s $8 billion deal to merge with Hollywood movie studio Skydance Media.
Early last month, New York City’s public pension funds sued to block the Skydance merger agreement, whose exclusive terms have prevented Paramount from considering a rival bid claiming to be worth $8.8 billion from Project Rise Partners, an investment consortium.
On Monday, Delaware Chancellor Kathaleen McCormick asked the pension funds for more information — an indication she is seriously weighing their request to at least temporarily block the deal from closing, according to sources briefed on the court proceeding.
Lawyers for Paramount had held out hopes that Judge McCormick — who last year famously smacked down Elon Musk’s $56 billion pay package from Tesla’s board — would rule from the bench and dismiss the suit, allowing the Paramount Skydance deal to proceed, sources said.
“If you are delaying a decision it’s bad for the people who did not bring the case,” a source closely following the suit said. “Paramount probably has real problems in court.”
Judge McCormick has not yet set a date for a new hearing, the court said Monday.
The biggest question for the judge, according to University of Pennsylvania Business Law School Professor Jill Fisch, is whether the largely unknown Project Rise Partners is a legitimate suitor.
“Our original offer had a letter from our bank Northern Trust verifying the financials,” Daphna Ziman, who is leading the Project Rise consortium, told The Post on Monday.
The Paramount Special Committee would not meet with the group, she said.
Project Rise Partners filed under seal with the judge how it has arranged the financing for what would be the $8.8 billion merger, said Ziman, who publicly has not revealed her backers.
The New York City pensions allege Skydance is buying media heiress Shari Redstone’s controlling stake in Paramount at a much higher premium than it is paying common stockholders and that common shareholders were left out of the process without a vote.
“Even more brazenly,” the suit alleges, “Skydance has agreed to pay for Redstone’s Central Park apartment and to pay for the lease for her private jet. Most egregiously, Skydance has agreed to indemnify Redstone for any breach of fiduciary duty claims arising out of the proposed merger, knowing full well that she would face massive personal liability for extracting so much value for herself.”
The plaintiffs said Monday they have a Paramount whistleblower who can speak about the sale process not being adequately open as Skydance — headed by David Ellison, the son of billionaire Oracle co-founder David Ellison — tries to close the deal, sources said.
The dispute is the latest wrench thrown into the merger, which has faced heat from the Trump administration, whose Federal Communications Commission is investigating allegations of political bias at CBS News over a “60 Minutes” interview with former Vice President Kamala Harris.
On Monday, Judge McCormick asked the parties when the FCC and its chairman, Brendan Carr, are expected to rule on the merger. Paramount believes the earliest the deal, signed in July 2024, could clear the FCC is March 18.
Charles Gasparino reported exclusively last week that the FCC’s decision could drag out until the summer.
Separately, President Trump has entered mediation talks with Paramount about settling his $20 billion suit alleging media bias during the election. The result of those mediation talks could impact the FCC, sources said.
“This could be the death by a thousand cuts,” the source closely following the situation said.
Private equity powerhouse Apollo Global Management, which had expressed interest last year in buying Paramount, is now no longer actively following the process, two sources close to the situation said, and it may be the only other logical suitor.
Edgar Bronfman Jr. was given the chance to bid last summer and withdrew his proposal. There is talk that he is still interested and may be seeking new backers, sources said.
The Special Committee, represented by law firm Cravath, Swaine & Moore, made the case that shareholders would be worse off if Skydance walked away since there is not a real alternative bidder, Ziman said.
Cravath did not return calls.
“I think the Judge is weighing how the offers impact the shareholders,” Ziman said. “who are the policemen, firemen and teachers who voted for President Trump.”
The plaintiffs are the New York City Fire, Police, Teachers and Board of Education pensions.
“Why would Trump [if he knew] want Larry Ellison to take money from the pockets of those hard-working shareholders?” she told The Post.
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