In the latest chapter of the Paramount Global/Skydance Media merger saga, shareholders are challenging the terms of the deal by filing a class-action lawsuit.

According to court documents dated July 24, the crux of the complaint claims that the “unfair” merger will primarily benefit Shari Redstone (who holds a controlling share in Paramount via National Amusements), while costing other shareholders US$1.65 billion in damages when the merger closes.

Investor Scott Baker—who owns more than 40,000 Class B shares in Paramount—filed the suit on behalf of other shareholders in Delaware’s Chancery Court, taking aim at Redstone, Skydance CEO David Ellison and Paramount’s board of directors for breaching their fiduciary duties.

After roughly six months of negotiations, Skydance wrapped up its deal to merge with Paramount earlier this month with a revised US$8-billion agreement—one that would pay Class B shareholders US$15 per share. However, Baker’s suit suggests that there “is not enough cash in the deal to buy out all of the non-NAI Class B shares.” This would result in shareholders receiving a mix of cash and Class B stock in the merged “New Paramount” company. “That payout is only worth US$12.23 per Paramount Class B share,” the suit argues.

The Paramount-Skydance deal is expected to close by Q3 2025, pending regulatory approvals and the 45-day “go-shop” window, which will end next month. During this period of time, Paramount can evaluate alternative bids—with Skydance receiving US$400 million if a better offer comes through. The suit also alleges that this break-up fee is exceptionally high, representing 4.8% of the total value of the merger. “Of the over 1,000 acquisitions in the US in the last decade that were valued at more than US$1 billion, only 3% had a break-up fee of 4.8% or more,” the suit adds, noting that this clearly reduces the likelihood of better bids surfacing.

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