Paramount Global to Pay $122 Million to Settle Shareholder Suits Over Viacom-CBS Merger

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Paramount Global disclosed on Friday that it will pay $122.5 million to settle lawsuits from Viacom shareholders arising from the company’s merger with CBS. In a securities filing, the compan…

, ousted board members in a “tyrannical” effort to merge the two companies. The suit alleged that CBS stock was overpriced in the merger, and that Viacom was undervalued, causing harm to Viacom shareholders.

The suit alleged that Redstone’s handpicked board members were conflicted, and did not pursue the best price on behalf of Viacom’s minority shareholders. When the merger was first contemplated in 2018, the suit alleged that Viacom was given an implied value of $12.8 billion. That effort collapsed, but the companies tried again a year later.

By that point, according to the suit, Viacom’s fortunes had improved, but the merger’s exchange ratio implied a value of just $11.8 billion — $1 billion less than it was worth a year earlier.CalPERS, the state pension fund, is the lead plaintiff in the case. A Delaware judge consolidated four separate Viacom shareholder suits into one in 2020.

In the securities filing, Paramount Global said that the company is still fighting its insurers in Delaware Superior Court over coverage issues. According to the filing, the “vast majority” of the settlement payment will be due no less than five days before the final settlement hearing.

 

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