(Reuters) – Skydance Media accuses the special committee of Paramount Global’s board of directors of violating the terms of its deal by extending the period in which it could negotiate with other bidders, the Wall Street Journal reported on Thursday.
Previously, experienced media executive Edgar Bronfman Jr. had sweetened his takeover offer for Paramount by offering majority shareholder National Amusements $6 billion plus a minority stake in Paramount.
Bronfman’s competing offer threatens to thwart a planned takeover by tech inventor David Ellison and his independent studio Skydance Media.
Shares of Paramount, home of Paramount Pictures, the CBS broadcast network and cable channels such as MTV, lost 1.7 percent in extended trading.
“Although Skydance is not currently exercising its right to terminate the transaction agreement, we reserve the right to do so in the future,” the report quoted a letter from Skydance’s lawyers as saying.
The special committee of Paramount’s board of directors declined to comment. A spokesman for Skydance Media could not immediately be reached.
The board’s special committee has extended the August 21 “go-shop” deadline for Bronfman’s consortium to September 5, Paramount said Wednesday.
If Paramount, which is controlled by Shari Redstone’s family business, accepts an offer that Skydance cannot beat, the media group would have to pay a severance payment of $400 million.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar)
