Paramount Global for sale latest - Variety: Skydance Alleges Project Rise Partners ‘Fraudulently Misrepresented’ Financing for Paramount Bid

Story from Variety:

The deal that would merge Skydance Media and Paramount Global is not over the finish line — and now lawyers for David Ellison’s Skydance are accusing investment group Project Rise Partners of staging a bid for Paramount that “fraudulently misrepresented” its financing and is threatening to delay the closing of the Skydance-Paramount pact.

Lawyers for Skydance Media alleged that the investor consortium calling itself Project Rise Partners “fraudulently misrepresented” their financing and adviser relationships in connection with the purported $13.5 billion rival bid for Paramount Global. The allegations were detailed in a March 10 letter sent by Skydance attorney Blair Connelly of Latham & Watkins to Project Rise Partners’ attorneys at the law firms Steptoe and Baker & Hostetler. In the letter, viewed by Variety, Connelly wrote that “we have recently uncovered overwhelming evidence indicating that Project Rise Partners (‘PRP’) fraudulently misrepresented itself in connection with the bidding process for Paramount Global (‘Paramount’) and in the Delaware Litigation.”

As first reported by Variety, Project Rise Partners in January submitted a letter to Paramount’s board with an offer it claimed was valued at $13.5 billion — and which PRP said was superior to the $8 billion bid from Skydance and RedBird Capital Partners (and backed by Oracle founder Larry Ellison, father of David Ellison). The special committee established by the Paramount board to evaluate M&A overtures rejected Project Rise’s proposal, saying the go-shop window for considering competing bids had closed.

Last month, lawyers for New York City pension funds filed a lawsuit seeking to block the Skydance-Paramount transaction, alleging the Paramount board (specifically, controlling shareholder Shari Redstone) failed to get the maximum value from a sale for other Paramount investors by refusing to consider Project Rise’s rival bid. A judge in the case, being heard in the Delaware Court of Chancery, last week agreed to accelerate the timeline for the lawsuit to proceed.

Meanwhile, on March 5, Project Rise submitted an FCC filing (at this link) opposing the Skydance-Paramount union — claiming, among other things, that the Skydance deal “raises a national security risk” of “Chinese influence” over CBS, because Chinese company Tencent Holdings is an investor in Skydance. The Skydance-Paramount deal requires FCC approval insofar as it involves the transfer of FCC-issued licenses for CBS-owned local stations to a new owner.

On Monday, Skydance fired back.

In a response filed March 10 with the FCC, lawyers for Skydance accused Project Rise of “seeking to hijack this Commission proceeding to buy time for litigation to proceed in the Delaware Court of Chancery, in an effort to force Paramount’s Board to consider Project Rise’s belated — and unserious — bid to acquire the company.”

Skydance’s letter noted that Project Rise “was expressly invited to submit a proposal to acquire Paramount” during the 45-day “go-shop” period provided for under the agreement between Paramount and the Skydance group — but failed to do so. “Even if Project Rise’s bid had been timely, it would not have merited serious consideration,” the Skydance filing said, because “Most notably, Project Rise has never demonstrated that it has the necessary financing.”

According to the Skydance lawyers, “Project Rise’s principals lack the experience and credibility to execute a transaction of this size.” Daphna Ziman, one of Project Rise’s co-chairs, previously served as president and CEO of Cinémoi, a pay-TV network that filed for Chapter 11 bankruptcy protection in August 2024, per the Skydance filing. “The only other apparent business activity that Ms. Ziman has conducted in the last several years relates to her non-profit ‘Children Uniting Nations,’ which raised $4,500 last year and has total liabilities that far exceed its assets,” the Skydance letter said.

Project Rise’s other co-chair, Moses Gross, is identified as CEO of investment firm Malka Equities, “which is purportedly leading the charge on the capital raising efforts for Project Rise’s $10 billion bid,” according to Skydance’s letter. Malka Equities has 12 employees and “no history of financing public company transactions,” the filing continued.

Per the Skydance filing with the FCC, Project Rise’s 2024 bid letter for Paramount listed among its financial partners Acquarian Holdings, which is a RedBird portfolio company “that obviously would not (and did not offer to) finance a competing bid.” In addition, the Skydance lawyers wrote, “Project Rise has also falsely claimed that Blackstone is an investor and Goldman Sachs is its financial adviser.”

In the letter to PRP’s attorneys, Connelly wrote that, “Put simply, stripped of the big-name financial players with whom PRP falsely claimed relationships, PRP’s supposed syndicate appears to be a ragtag consortium of small businesses masquerading as a group capable of supporting a multibillion-dollar cash offer.”

According to Skydance, PRP’s “fraudulent” bid for Paramount was also an attempt by Ziman to try to “save her failed business Cinémoi” and that she “fraudulently misrepresented the status of the bid to a federal bankruptcy court.” On Nov. 5, 2024, Ziman submitted a declaration to the U.S. Bankruptcy Court for the Central District of California stating that her plan to reorganize Cinémoi relied on the Project Rise Partners bid for Paramount and that once PRP acquired Paramount, it would “put us in a position for Paramount Global to acquire Cinemersion,” a joint venture part-owned by Cinémoi; that in turn “will enable the Debtor to generate revenue to pay its creditors under a plan of reorganization,” per the bankruptcy declaration. According to Ziman’s declaration, Cinémoi expected to “file a plan of reorganization between 30 and 45 days after it is acquired by Paramount Global.”

“In short, Ms. Ziman falsely told the bankruptcy court the PRP bid was alive when it was dead and she knew full well it was dead,” Connelly wrote in the letter to Project Rise Partners’ attorneys.

Asked for comment, a rep for Project Rise Partners said in a statement to Variety, “The attack by Skydance is outrageous and an effort to deflect from the real issue here. Project Rise Partners’ offer is superior to Skydance’s and would greatly benefit shareholders. We have the financial commitments to complete a transaction with Paramount Global. As for Skydance’s specific allegations, we have received them, and we will be responding in detail shortly.”

Skydance’s legal team also sent a copy of the letter to Project Rise Partners’ attorneys to Grant & Eisenhofer (which is representing the New York City pension funds in the Delaware litigation). A rep for Grant & Eisenhofer said in a statement, “Neither my firm nor my clients have any information yet on the bona fides of PRP’s offer. We therefore look forward to PRP’s response.”

Meanwhile, Skydance’s response to the FCC also addressed Project Rise’s stated objections to the Skydance-Paramount deal. The Skydance lawyers said it was “nonsense” to suggest that the passive investment of Tencent in the newly merged company would “afford the Chinese government influence over New Paramount and compromise national security.” The letter said the Skydance-Paramount deal “will ensure that New Paramount is controlled solely by American citizens and entities — the Ellison Family and RedBird Capital Partners,” which will hold all the voting shares and most of the merged entity. Tencent will “hold a purely passive interest” of less than 5% of New Paramount’s non-voting stock, according to the letter.

“Any insinuation that a great and deeply patriotic American family, the Ellisons, will be swayed by Communist influences is offensive,” Skydance’s FCC filing said.

In addition, Project Rise, in its filing with the FCC, claimed that Skydance’s planned use of AI would result in “job losses in local news, inaccurate and biased reporting, and national security risks.” In response, the Skydance lawyers said that the planned use of AI technology is to “improve efficiency,” and will thereby promote the public interest.

“The efficiencies enabled by AI will help New Paramount make strategic investments in the legendary newsgathering and reporting efforts of the national CBS television network and the company’s owned-and-operated local stations, ensuring that they continue to serve as trusted sources of news,” the Skydance letter said.

Project Rise’s March 5 filing with the FCC also said there were “disturbing signals that Skydance has already become actively involved in Paramount’s management.” Project Rise cited a report that RedBird’s Jeff Shell (set to become president of the merged Skydance-Paramount) had applied “escalating pressure” on CBS News to settle a lawsuit filed by President Trump. Prior to the November election, Trump sued CBS News, alleging a “60 Minutes” interview with Kamala Harris was deceptively edited. Paramount and CBS last week moved to dismiss Trump’s suit as “an affront to the First Amendment.”

Skydance’s lawyers said allegations of “gun-jumping” before the Paramount deal has closed were “utterly false.”

“Project Rise offers no factual basis to support its assertion of improper coordination between the parties,” the letter said. “The Skydance Consortium is well aware of the restrictions imposed by the antitrust laws and the Commission’s rules and has complied fully with them.”

FCC Chairman Brendan Carr, whom Trump picked to run the agency, has said the allegations that CBS engaged in “news distortion” with respect to the “60 Minutes” Harris interview would be part of the review of the Skydance-Paramount deal. In an FCC filing last Friday, CBS said that the “news distortion” complaint was specious and that it presumes the agency has authority to take action that would violate the broadcaster’s free-speech rights.