An attorney representing an investment group that owns some of Paramount’s common stock has sent a cease-and-desist letter to Shari Redstone urging her to stop participating in pre-merger discussions involving Paramount’s board of directors and Skydance Media.
The letter sent on Wednesday came from Aspen Sky Trust, which owns more than 6.5 million shares of Paramount stock, amounting to just over 1 percent of all shares issued. It follows a letter sent to Paramount’s board of directors earlier in the week, in which Aspen Sky Trust expressed concern over the board’s decision to hold exclusive pre-merger discussions with Skydance Media for 30 days, while apparently ignoring other offers made by Apollo Global Management and Allen Media Group.
Those offers could be more-lucrative for Paramount’s shareholders like Aspen Sky Trust, the letter sent earlier in the week argued. By comparison, Aspen Sky Trust and other shareholders believe the offer being considered by Paramount’s board involving Skydance Media would over-benefit Redstone, whose National Amusements holds a controlling interest in the entertainment company.
On Wednesday, attorney William Ripley, Jr. sent a cease-and-desist letter to Redstone on behalf of Aspen Sky Trust, complaining that her discussions with Skydance Media prevented competitive bidding by other parties interested in Paramount and demanding she immediately stop participating in pre-merger talks with the company.
“As a member of the Board of Directors, Shari Redstone has, at all times relevant to the matters discussed herein, held a fiduciary duty to Aspen Sky Trust,” Ripley wrote in the letter, a copy of which was obtained by The Desk on Wednesday. “As a fiduciary, she had a legal and affirmative obligation to protect, safeguard and utilize the utmost caution and care in financial matters relating to Paramount and its shareholders. Aspen Sky Trust has reasonable belief that Shari Redstone has taken affirmative steps to promote exclusive negotiations by and between Paramount and Skydance Media for personal gains.”
Ripley characterized those discussions as “tortious interference with existing and future business relationships” and a breach of Redstone’s “fiduciary duties” to shareholders. The attorney warned that Aspen Sky Trust might sue if Redstone continues to engage in those discussions or if the Paramount board continues with its plan to explore a merger with Skydance Media on an exclusive basis.
Ripley asked for Redstone or her legal representatives to send a written confirmation acknowledging their demand to “cease and desist from all breaches of fiduciary duties” by a Friday deadline. It wasn’t clear if Redstone or anyone at Paramount had responded to the letter as of Wednesday evening.
The letter went on to demand that Redstone and National Amusements preserve all records of their communications with Paramount’s board and Skydance Media in the event of litigation.
“In addition, Aspen Sky Trust places Shari Redstone and National Amusements, Inc. on notice not to allow the deletion of any electronic communications, such as emails, relating to the Agreements,” the letter continued.
