Skydance Media Accuses Paramount of Breaching Deal Terms

(Bloomberg) — David Ellison’s Skydance Media accused CBS parent Paramount Global of breaching the terms of their merger agreement by continuing to engage with another suitor, people familiar with the matter said, citing a letter sent by Skydance lawyers.

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On Wednesday, after receiving a sweetened $6 billion proposal from longtime media investor Edgar Bronfman Jr., Paramount extended a deadline to consider another offer until Sept. 5. The deadline was originally scheduled to expire that night.

Skydance said Paramount didn’t provide written notice of the extension of the so-called “go-shop period,” as required by their merger agreement, said the people, who asked not to be identified discussing private correspondence. The company also argues the extension isn’t valid because the Bronfman proposal isn’t superior to the Skydance offer, a condition of their deal.

Continued conversations with Bronfman will constitute a material breach, the letter said. Skydance said it could take steps to either enforce its merger agreement or terminate it.

Representatives of Bronfman and a special committee of the Paramount board declined to comment.

The Wall Street Journal reported on the letter earlier Thursday.

Skydance, an independent film and TV company led by technology heir Ellison, has reached an agreement to buy National Amusements, Paramount’s controlling stockholder, and then combine the businesses.

Bronfman has proposed a similar transaction, saying his offer is better because it results in less dilution for Paramount stockholders.