Paramount And Skydance Merger Facing A Class Action Lawsuit By A Shareholder

The suit, which was filed in Delaware court by Class B common stockholder Scott Baker, broadly alleges that controlling shareholder Shari Redstone forced through an “unfair” deal that benefits her and Paramount’s parent company National Amusements Inc (NAI) at the expense of Class B shareholders, who had no say in the deal.

The suit argues Redstone was intent on selling her interest in Paramount to Skydance “regardless of its impact on other Paramount shareholders.”

Through a unique ownership structure, the Redstone family’s holding company NAI owns 77% of the voting shares in Paramount, though it only holds a roughly 10% equity stake.

Under the proposed deal, Paramount’s Class B stockholders can cash out their shares at US$15. However, the suit alleges there isn’t enough money in the deal to buy out all of the non-NAI Class B shares. Instead, argues the suit, shareholders would get a mix of cash and Class B stock in the merged entity amounting to only US$12.23 per Class B shares.

The suit also alleges that Paramount’s board is “packed with Redstone insiders, over whom she exercises control,” and that Redstone has a history of controlling company boards and ousting directors in order to bring merger deals to fruition.

On the latter point, it cited the 2019 CBS-Viacom merger as an example of Redstone doing “everything in her power” to force a deal through, “even if it took her a couple of years and required ousting directors, packing boards of both merging companies with directors who would support her, and using NAI’s status as controlling shareholder to get what she wanted.”

In addition to Redstone, Paramount and NAI, the lawsuit also names Paramount board members Barbara Byrne, Linda Griego, Judith McHale, Charles Phillips and Susan Schuman as defendants, in addition to Skydance and its CEO David Ellison.

The filing of the lawsuit comes three weeks after Paramount and Skydance announced they had come to terms on a deal to form New Paramount following a lengthy negotiation process that saw several other bidders in the picture. The companies said they expect the transaction to close in the first half of 2025.

Through the deal, Skydance, which is backed by private equity firms RedBird Capital and KKR, will invest around US$2.4bn to acquire Paramount Global’s parent company, National Amusements, for cash and US$4.5bn for the stock/cash merger consideration to be paid for publicly traded Class A shares and Class B shares. It will also invest US$1.5bn to help improve Paramount’s balance sheet.

Ellison will serve as chairman and CEO of New Paramount, while Jeff Shell, the former NBCUniversal CEO who is currently chairman of sports and media at RedBird Capital, has been named president. Those appointments will become effective when the transaction closes.

The deal also includes a 45-day ‘go shop’ period, which allows Paramount to look for better offers before going with Skydance. However, going with another company would mean Paramount would have to pay Skydance a US$400m “breakup fee.” On Friday, billionaire Barry Diller, who emerged as a potential suitor last month, indicated that his company IAC was likely out of the running.

It had been widely assumed that the Paramount-Skydance deal would draw shareholder scrutiny and lawsuits, and there are expected to be several others filed in the coming months.

Primedia, Parent Company For 947 And Eyewitness News Reportedly Up For Sale

Private equity shareholders of Primedia are considering strategic options for their stakes in the South African broadcasting group, according to people with knowledge of the matter.

The company, owned by EPE Capital Partners, FirstRand, Old Mutual and the Mineworkers Investment Trust, has turned around under CEO Jonathan Procter, helping boost its valuation, said the people who asked not to be identified because the talks are private.

A jump in operating cash flow at Primedia makes it easier for the private equity firms to begin discussions with local and international companies, they said.

Primedia attracts interest from international and local investors from time to time

Interest in broadcasting firms in Africa — home to the youngest and fastest growing population in the world — has been on the rise in tandem with the surging use of mobile phones and declining data prices.

France’s Canal+ is in the process of acquiring DStv parent MultiChoice Group in a deal that values the company at R55-billion.

Primedia, the owner of Eyewitness News and Radio 702, is targeting a 25% increase in earnings before interest, taxes, depreciation and amortisation to R1-billion in the near term, two of the people said. Improving finances at the broadcaster may value the firm at R6.4-billion to R9.2-billion, the people said.

Primedia “attracts interest from international and local investors from time to time”, the company said in an emailed response to queries. “These expressions of interest are considered by the board and shareholders, although no process has been announced by the board.”

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EPE Capital and Old Mutual Private Equity referred queries to Primedia. Rand Merchant Bank, a unit of FirstRand, and Mineworkers Investment didn’t respond to requests for comment. The process is still at an early stage and there’s no guarantee any deal will go ahead, the people said.

Primedia was founded in 1994 and operates in eight African countries including South Africa, Nigeria and Zimbabwe.

The company recently established a studio production business that holds the licensing rights to local versions of shows including the Masked Singer and Deal or No Deal.

The company has also started selling content to streaming services such as Netflix and Apple+, and opened a sporting business for advertising and sponsorships as it increasingly pivots the company to becoming more digital focused. 

MultiChoice's Diversity At Risk And Canal+ Plans For The Company Might Hurt M-Net

As some readers are aware, Canal+ and MultiChoice are currently finalizing terms of the acquisition as they seek approval from local legislation. With lingering concerns surrounding the fate of MultiChoice's linear offering once Canal+ gains ownership.

In the cases of mergers and acquisitions, Canal+ (the owner) implements cost cutting measures to the acquired company (MultiChoice). Job losses is one with more corporate downsizing awaiting the services of DStv and Namola.

Following Naspers separation from MultiChoice, the pay-tv company built its presence around the world of gambling (SuperSportBET), insurance (DStv Insurance) and security (Namola). Canal+ main interests are that of multimedia brands such as DStv and Showmax.

If anything, the acquisition could see that diversity get scrapped or sold particularly if more losses had been generated from that service.

As for the latter DStv and Showmax, Canal+ seems to be hinting at a restructure for these assets which would see them serve as competitors. Maybe after the acquisition, Canal+ will look into splitting Showmax as a separate entity. 

Remember they were rumours of MultiChoice wanting to be a streaming based company before Canal+ made their attempts at acquiring the company. One instance would be Canal+ killing off whatever remains of M-Net and similar to Me and 1Magic content gets folded under Showmax. 

It was stated by the potential new owners Canal+ that sports lures more traffic than anything else on cable. Although, M-Net remains the only TV channel for the latest international content this has been under siege due to increased competition from Netflix and Disney+.

Another instance is that M-Net receives a similar structuring to its movie offering with the premium lineup was further reduced to match that of other TV channels. Perhaps in place of this would be some content Canal+ had produced in France and parts of Europe. 

Point is on top of a fallen consumer base, Canal+ is basically a competitor to M-Net's linear offering. Similar to how M-Net has co-produced shows with Fremantle, Acorn TV and the BBC even Canal+'s StudioCanal had been involved in similar excursions with MGM Studios and Lionsgate. 

Canal+ wants to turn MultiChoice into an entertainment leader in Africa by producing content to appease the masses and to also distribute in France and Europe. StudioCanal was filming Glen Powell's Huntington film in Cape Town with plans to do more productions in South Africa.

Vivendi Posts First-Half Revenues Of $9.8 Billion, Bolstered By Canal+, Lagardere

Vivendi, the parent company of French pay TV banner Canal+ Group, saw its 2024 first-half revenues reach $98 billion, a 5.8% year-on growth. The media conglomerate also posted a 98.4% spike in second-quarter revenues.

Lagardère, the media, publishing and travel retail conglomerate which was acquired last year, as well as Canal+ Group, bolstered revenues. Vivendi also boasted an EBITA of $671 million — 39.3% up compared with the first half of 2023, driven by the consolidation of Lagardère and the growth of Havas. At constant currency and perimeter, EBITA increased by 13.5%, while adjusted net income reached $357 million.

Canal+ Group’s revenues went up by 4.6% to $3.2 billion, helped by TV operations in mainland France and overseas. Revenues from Canal+’s film and TV group Studiocanal also increased by 8.6%, thanks in part to the performance of Amy Winehouse biopic “Back to Black” which was released on April 24 and has sold around the world.

Under the leadership of CEO and chairman Maxime Saada, Canal+ has also increased its interest in Scandinavian pay TV banner Viaplay to 29.33%, becoming its largest shareholder; and recently took a stake in leading Senegalese production company Marodi TV. Canal+ has also made a tender offer to buy the African service MultiChoice Groups.

Asia is also part of Canal+’s international expansion plans. The company has increased in the leading Asian OTT service Viu to 36.8% and is now looking to have it go up to 51%.

Back in France, Canal+ Group has bought OCS, pay-TV package and Orange Studio, the film and series co-production subsidiary. Some of the new editorial developments include the creation of Studiocanal Stories, a new label dedicated adapting literary works into films and TV series in France and several European countries. Canal+ Group is also continuing to strike deals and partnerships with big U.S. players, including Warner Bros. Discovery which signed a distribution agreement with the French banner for its standalone streaming service Max.

Vivendi’s management board gave an update on the group’s plan to split into three separate entities and list assets. Under current plans, Canal+ will be listed at the London Stock Exchange, Havas at the Euronext Amsterdam, and an entity which will bring together publishing and distribution, including Louis Hachette Group, at the Euronext Growth Paris. Vivendi will remain listed on Euronext Paris.

Vivendi said Canal+ and Havas will maintain their leadership and operational teams at the Paris headquarters, and they will also remain French tax residents for French corporate income tax purposes.

Yannick Bolloré, chairman of Vivendi’s Supervisory Board, said the group’s half-year results were “driven by our three main businesses, which contributed to organic revenue growth of nearly 6% and organic EBITA growth of 13.5%.”

Arnaud de Puyfontaine, Vivendi CEO, meanwhile, said its “various businesses have demonstrated their dynamism, both in terms of organic growth and acquisitions, the strength of their respective business models and their ability to transform and adapt to their environment and the expectations of their customers.” The executive said the group is currently “strengthening its international positions.”

eMedia Investments Outlines Plans For eVOD, Unveils Viewing Figures For The Platform

eMedia outlines plans for streamer eVODeMedia Holdings, the parent of e.tv and Openview, has disclosed viewer adoption figures for its eVOD streaming service, which it launched three years ago.

In eMedia’s annual report for the 2024 financial year, published on Monday, the group said some 1.13 million users have registered to watch the service since its introduction in August 2021.

Although the group hasn’t disclosed how many active users eVOD has, it claimed a 19% increase in watch time over the 2023 financial year, reaching 1.3 billion minutes.

Plans for the current financial year include expanding the available applications for smart TVs

The service, which has both free and subscription components, was launched in response to other streaming services available in South Africa, including Showmax and Netflix. It includes a range of local programming, including original eMedia series and movies.

eMedia disclosed the most popular content available on eVOD. These programmes are:

• Local series: House of Z Wide; Smoke & Mirrors; and Isitha: The Enemy – Blood and Betrayal

• International series: Elif, Annekan die Swa Kry and Doodsondes

• eVOD originals: The Umbrella Men: Escape from Robben Island; Yolanda is Swanger and Piet’s Sake

Growth plans

The broadcasting group said its plans for the current financial year – to March 2025 – include expanding the available eVOD applications for smart TVs, offering new content via Openview’s new set-top box (which can connect to the internet), and offering new advertising “innovations” that include the introduction of live-stream advertising and display banner ads in programming.

In the annual report, eMedia described eVOD as the “Netflix of South Africa” – MultiChoice-owned Showmax and Netflix itself might beg to differ – and offers a platform “primarily filled with e.tv’s local content in a video-on-demand format”.