Attorneys for Skydance Media have fired off a letter to their counterparts at Paramount Global to complain about a decision by Paramount’s board that affords them the opportunity to weigh other bids for acquisition.
This week, Paramount received an offer from former Warner Music chair Edgar Bronfman, Jr. that includes a payment to Paramount’s largest shareholder, National Amusements, for the acquisition of their position as well as a $400 million break-up fee to Skydance in order to move away from their deal.
Skydance had previously offered to acquire National Amusement’s controlling share of Paramount’s stock and a financial investment in the entertainment company to merge its assets with the production company. The deal allowed Paramount’s board to entertain other offers during a 45-day “go-shop” period, which ended on Wednesday.
Bronfman made his preliminary offer on Monday, and then sweetened the deal by offering slightly more money on Wednesday. Paramount’s board decided to expand the go-shop period to mid-September in order to evaluate Bronfman’s offer.
On Thursday, the Wall Street Journal said attorneys representing Skydance fired off a letter about the board’s decision to push back the deadline, saying Bronfman’s offer was not “superior” enough to trump its earlier bid.
Attorneys for Skydance accused Paramount’s board of committing “an incurable, material breach of the Transaction Agreement” by not accepting its offer in full by the close of business Wednesday.
“While Skydance is not currently exercising its right to terminate the Transaction Agreement, we reserve the right to do so in the future,” the letter said, according to the newspaper.
