Mario Gabelli, a long-time shareholder of Paramount and its predecessor companies, is raising questions and seeking more information regarding the pending merger between Paramount and Skydance. Specifically, Gabelli, an investor and fund manager, is pushing for greater financial data and clarity on the valuation of National Amusements, Inc., which is an integral part of the merger deal. This complex, two-step transaction involves Skydance investing $8 billion to first acquire control of NAI and then merge with Paramount. The merger, which values Skydance at $4.75 billion, includes a $2.4 billion cash acquisition of National Amusements and is anticipated to close in the third quarter of 2025.
Gabelli has taken to social media, particularly Twitter, to share his concerns and efforts to increase transparency in what he calls “Operation fish bowl.” It is evident that he is determined to shed more light on the details of the merger transaction. While Gabelli has not explicitly mentioned legal action, there are reports indicating that he may have made legal overtures in an attempt to obtain more information. Although no formal legal complaints have been cited, it has been reported that Gabelli has reached out to Paramount’s general counsel for additional details regarding the merger deal.
At the core of Gabelli’s concerns lies Paramount’s dual-class stock structure, wherein Shari Redstone’s NAI controls nearly 80% of the company’s Class A (voting) shares. This setup has raised apprehensions among Class B shareholders, including Gabelli, who fear being at a disadvantage in the event of an M&A deal. Gabelli Funds, for instance, holds close to 4.9 million Class-A voting shares in Paramount. Skydance’s latest offer, which includes various incentives to appeal to Class B shareholders and prevent potential lawsuits, underscores the importance of addressing concerns regarding indemnification and fair treatment for all shareholders.
Gabelli’s push for transparency extends to the need for disclosure of the price paid to NAI for both non-voting and voting shares in connection with the merger deal. This call for openness and accountability reflects broader concerns within the investor community about the need for clarity and fairness in corporate transactions. It is worth noting that other investors, such as the Employees’ Retirement System of Rhode Island, have also resorted to legal action to compel companies to release relevant documents and information.
Mario Gabelli’s efforts to advocate for more transparency and clarity in the Paramount-Skydance merger highlight the significance of investor activism and advocacy in corporate governance. As the deal progresses, it will be essential for all stakeholders to address concerns, engage in meaningful dialogue, and uphold principles of transparency and accountability to ensure a fair and equitable outcome for all parties involved.