A fund of Paramount Global Inc. investor Mario Gabelli notified Delaware's Court of Chancery on Thursday that no other stockholders have sought to lead a suit challenging Paramount Global's $8.4 billion acquisition by David Ellison's Skydance Media, with the fund seeking lead plaintiff status and Entwistle & Cappucci and Farnan LLP to be lead counsel.

Gabelli's complaint, filed Aug. 19, names Skydance, Harbor Lights Entertainment — formerly National Amusements Inc. — Shari Redstone and others and seeks damages for "unfair and inequitable merger consideration" received by Paramount controller NAI and its affiliates compared with Class A shareholders.

In a brief supporting the lead plaintiff appointment, Gabelli Value 25 Fund alleged that the Shari Redstone-led NAI parties facilitated the merger through a "corrupted sale process" that allowed them to garner a 165% premium for their shares compared with Class A stockholders.

The NAI parties held 77.4% of Paramount's Class A shares going into the deal, the complaint said, and allegedly relied on both voting control and a purportedly conflicted Paramount board to steer the deal to Skydance without a "majority of the minority" unconflicted shareholder approval.

"The NAI defendants' outrageous non-ratable premium agreed to by the Skydance defendants cost the Class A minority at least $270 million in improperly diverted merger consideration," Gabelli said in its brief. Neglected along the way, according to the complaint, was an obligation to secure terms that maximized value to Class A shareholders "or, at the very least, was equitable."

NAI "crammed through" the deal, Gabelli alleged, using what the fund described as a rigged voting system favoring Skydance.

As a result, the lead plaintiff brief said, the NAI parties named in the suit "forwent proposals that would have paid the Class A minority 21.7% to 24.2% more per share, in favor of the Skydance proposal that directed hundreds of millions more to the NAI defendants at the expense of the Class A minority."

The case is assigned to Chancellor Kathaleen St. J. McCormick.

Counsel for the parties did not immediately respond to requests for comment.

Gabelli's complaint named five members of Paramount's board special committee as well as NAI, Shari Redstone, Skydance Media and RB Tentpole LP, or "Redbird," a Skydance investor that participated in merger negotiations. Redbird will nominate two of Paramount's 13 board members and own 10% of Paramount's nonvoting Class B stock.

As part of the merger, Skydance paid NAI $1.75 billion in cash and assumed $650 million in NAI debt, with NAI receiving the equivalent of $60.95 for its Class A shares and $15 per share for its nonvoting Class B shares.

Gabelli owned 52% of the Class A shares held by non-NAI-aligned shareholders and reported investigating the deal for a year beginning in early 2024, supported by a documents inspection, according to the complaint.

Including affiliated funds and advisers publicly opposed to the deal, Gabelli said in its complaint that the dissident group's holdings would have determined the outcome if a majority of the minority vote had been required.

In addition, Gabelli argued that the Class A-shareholding minority opponents were offered only nonvoting Class B shares in New Paramount if they chose to roll over their Class A shares into the new company.

Gabelli Value 25 Fund Inc. is represented by Sue L. Robinson, Brian E. Farnan and Michael J. Farnan of Farnan LLP and Vincent R. Cappucci, Andrew J. Entwistle, Joshua K. Porter, Jessica A. Margulis and Andrew M. Sher of Entwistle & Cappucci LLP.

Skydance Media LLC is represented by David E. Ross and S. Michael Sirkin of Ross Aronstam & Moritz LLP and Blair Connelly, Zachary L. Rowen, Alexander L. Mills, Yan Birzu Chu, Jack M. McNeily, Matthew L. Strand, J. Christian Word and Stephen T. Nasco of Latham & Watkins LLP.

Barbara Byrne, Linda M. Griego, Judith McHale, Charles E. Phillips, Jr. and Susan Schuman are represented by Blake Rohrbacher, Daniel E. Kaprow, Christine J. Chen, Elizabeth J. Freud and Benjamin O. Allen of Richards Layton & Finger PA and Gary A. Bornstein, Michael P. Addis, Helam Gebremariam and Katherine DuBois of Cravath Swaine & Moore LLP.

RB Tentpole LP is represented by Daniel B. Rath, Rebecca L. Butcher, Howard W. Robertson IV and Cheol W. Park of Landis Rath & Cobb LLP.

The case is Gabelli Value 25 Fund Inc. v. Harbor Lights Entertainment Inc. (fka National Amusements Inc.) et al., case number 2025-0921, in the Court of Chancery of the state of Delaware.