Paramount Global is set to lose four members of its board of directors in the coming weeks as the company continues to explore a potential tie-up with film and television production company Skydance Media, according to a report.
On Wednesday, the Wall Street Journal said the company could disclose the departures in a regulatory filing as soon as this week.
Three outgoing board members — former Spotify advertising executive Dawn Ostroff, ex-Sony Entertainment president Nicole Seligman and investment and banking executive Frederick Terrell — were part of a special committee at Paramount tasked with exploring different potential suitors for a merger or acquisition of the entertainment company’s assets with another firm.
The other departing board member, Robert Klieger, is the personal attorney of Shari Redstone, whose National Amusements owns a controlling stake in Paramount’s common stock. He leaves at a time when Redstone is under fire from shareholders for allegedly coercing Paramount’s board to hold pre-merger discussions with Skydance Media on an exclusive basis, a move that effectively tables the consideration of offers made by Apollo Global Management, Allen Media Group and other firms.
It was not clear if Klieger’s departure was connected to shareholder angst over those exclusive discussions, which triggered complaints from at least two groups of investors this week. The Journal’s original report on Wednesday said three board members were leaving, but the story was amended a few hours later after one shareholder — Aspen Sky Trust — sent a cease-and-desist letter to Redstone via her attorneys that contained a threat of litigation if she purportedly continued to encourage Paramount’s board to hold exclusive pre-merger talks with Skydance.
In all three letters, shareholders complain that Redstone and Paramount’s board were not affirming their fiduciary responsibility to investors by exploring the best possible deal for Paramount. Last week, financial news outlets reported that preliminary plans called for Paramount to spend $5 billion acquiring Skydance Media through an all-stock transaction, with National Amusements receiving $2 billion in cash. As part of the deal, Skydance Media would pay down a substantial amount of Paramount’s debt tied to its film and television studio business and linear content channels.
The deal is structured differently from one offered by Apollo Global Management, a New York hedge fund that first offered $11 billion for Paramount’s studio business, then increased the bid to $26 billion for the entire company. Shareholders expressed concern that Apollo Global would be able to finance that deal, according to media reports.
Allen Media Group, the media company founded by entertainer Byron Allen, made a separate bid to acquire Paramount for $18.5 billion last April and a revised offer of $14.3 billion earlier this year, the Journal reported. The second offer was made via email messages sent to certain Paramount executives and members of its board, including Redstone, the Journal said. Steve Cahill, an industry analyst with Wells Fargo, expressed skepticism that Allen could finance the deal — a view shared by some members of Paramount’s board.
Any acquisition or merger is subject to the approval of Paramount’s board.
