Hedge fund Barington Capital urges Paramount Global to consider other bidders

Hedge fund Barington Capital Urges Paramount Global to Consider Other Bidders Amid Skydance Merger Talks

In a bold move, hedge fund Barington Capital has called on Paramount Global to halt its exclusive merger talks with Skydance Media, arguing that all shareholders would benefit from exploring other potential bidders. The New York-based hedge fund, which owns a significant stake in Paramount, is among a growing number of investors expressing concerns about the fairness of the deal, which is perceived to heavily favor the company’s controlling shareholder, Shari Redstone.

Barington’s portfolio manager, James Mitarotonda, penned a letter to the Paramount board, criticizing the decision to enter into an exclusivity agreement with Skydance. He argued that by not allowing other parties to negotiate or conduct due diligence, the Special Committee overseeing the deal has stifled the process and potentially limited shareholder value.

Paramount recently entered into a 30-day exclusive negotiating period with Skydance, as the board evaluates a potential acquisition of the independent studio in a stock deal estimated to be worth between $4 billion to $5 billion. Skydance is also in talks to acquire National Amusements (NAI), the company holding the Redstone family’s controlling interest in Paramount, with the completion of this deal contingent upon a Skydance-Paramount merger.

Mitarotonda raised concerns about conflicts of interest and self-dealing in the Skydance deal, particularly highlighting the potential dilution of value for other Paramount shareholders. He suggested that Paramount consider an offer from private equity giant Apollo Global Management, which has expressed interest in acquiring Paramount for over $26 billion, including debt.

The battle over the future of Paramount and Skydance comes at a time when companies in the entertainment industry are grappling with technological advancements and evolving consumer preferences. Larger investors, including Ariel Investments and Gabelli Funds, have also voiced their concerns about the proposed merger.

Paramount has yet to comment on Barington’s letter, which was first reported by Bloomberg. The outcome of this high-stakes corporate drama remains uncertain, as stakeholders await further developments in the ongoing negotiations.

(Reporting by Svea Herbst-Bayliss in New York and Dawn Chmielewski in Los Angeles; editing by David Evans)