Paramount Global has agreed to settle a shareholder lawsuit that claimed that the 2019 CBS-Viacom merger was unfair for shareholders.According to a securities filing Friday, Paramount will pay the shareholders $122.5 million to settle the claims, subject to a long-form settlement agreement and approval by Delaware’s Chancery Court.The California Public Employees’ Retirement System (“CalPERS”) was lead plaintiff in the litigation, which also named Shari Redstone and the Redstone family’s National Amusements as defendants. Paramount CEO Bob Bakish was also a defendant, but was removed from the suit in Dec. 2020.Indeed, Redstone was at the center of the suit, which claimed that Viacom’s board accepted a lower price for the merger in order to secure Redstone’s governance priorities (namely that the company would be led by Bakish and much of his executive team).“Plaintiffs allege that the willingness of the fiduciaries who served on Viacom’s transaction committee to allow Ms. Redstone to dominate their decision-making rendered them servile tools in Ms. Redstone’s relentless pursuit of a Viacom/CBS combination to advance her interests,” Vice Chancellor Joseph Slights wrote in a Dec. 2020 decision allowing the litigation to proceed.Slights added in another decision a month later that the claims “allow a reasonable inference that CBS’s acquisition of Viacom was motivated not only by Ms. Redstone’s concerns about Viacom’s viability as a going concern, but also her desire to shop NAI following their consolidation.”Redstone, of course, pushed for the merger of the companies that her father, the tycoon Sumner Redstone, had built over decades. Sumner Redstone died in Aug. 2020 at age 97.The CBS-Viacom merger created a new company, led by Bakish, called ViacomCBS, with Redstone serving as non-executive chairman. The company renamed itself Paramount Global last year.Paramount also notes that it is also in litigation with some of its insurers, and adds that “pending recovery of any such insurance proceeds, the Company will advance funds for the settlement when they become due.”The CBS-Viacom merger, Shari Redstone’s relationship to her father, and her effort to reunite the companies, is a centerpiece of a new business book called Unscripted: The Epic Battle for a Media Empire and the Redstone Family Legacy, by James B. Stewart and Rachel Abrams.“All children feel the need to prove themselves. But she was really under a burden here,” Stewart told The Hollywood Reporter in February. “I think one of the most poignant scenes in the book is at the end. Shari loved her father and desperately wanted his recognition and approval. There’s a poignant scene at the end where, after his funeral, she goes to her father’s closest confidant, an old friend and business colleague, and asks him, essentially, “Do you think he loved me?” I mean, I’m telling you, it almost makes me cry. It’s so sad that she had to ask that.”
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