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GAMCO Sues National Amusements Over Unequal Paramount–Skydance Merger Payout

Sealed in Delaware Chancery, the complaint relies on Section 220 records to challenge NAI’s $60-per-share payout versus $23 for other Class A holders

Overview

  • Mario Gabelli’s GAMCO filed a sealed class-action complaint on August 13 in Delaware’s Court of Chancery on behalf of its Value 25 Fund, affiliates and about 750 advisory clients who held Paramount Class A shares.
  • The suit alleges Shari Redstone’s National Amusements received roughly $60 per Class A share while all other Class A shareholders were paid $23 per share.
  • Plaintiffs point to nearly 10,000 pages of documents produced under Section 220 and a prior judge’s finding that GAMCO had a credible basis to suspect wrongdoing.
  • Deal mechanics show the two-step transaction allocated $2.4 billion to NAI, $4.5 billion to non-NAI shareholders and left Skydance’s consortium with full voting control of New Paramount.
  • Neither National Amusements nor Paramount commented and the complaint is expected to be the first of several legal challenges to the closed merger.