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Paramount Global PARA has agreed to pay $122.5 million in a lawsuit settlement claiming that the CBS-Viacom merger was unfair to shareholders.
The company revealed that it has agreed to settle the class action litigation now pending in the Delaware Court of Chancery, reports the Variety.
According to the lawsuit, during the merger process, CBS stock was overpriced, and Viacom was undervalued, causing harm to Viacom shareholders.
The lawsuit alleged that Paramount Global’s chairwoman, Shari Redstone, ousted the board members in a “tyrannical” effort to merge the two companies, as reported by Variety.
The California Public Employees’ Retirement System (CalPERS), the lead plaintiff in the case, has said in a statement that the case underscores the problems with dual-class share structures.
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“CalPERS believes that this settlement, one of the largest class action settlements in Delaware history, confirms our decision to take action against controller overreach and to rectify the harm suffered by Viacom’s unaffiliated stockholders,” the outlet quoted Matthew Jacobs, the general counsel of CalPERS saying.
According to the report, Paramount Global faces a separate class action lawsuit from the CBS shareholders.
That lawsuit challenges the merger and claims that Joseph Lanniello, the former acting CEO of CBS, was given a $125 million severance to buy his support for the merger.
The CBS-Viacom merger has created a new company called ViacomCBS, led by Paramount CEO Bob Bakish.
Last month, Paramount reported a net loss attributable to common stockholders of $37.9 million, or $0.17 per diluted share.
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Photo: Shutterstock
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Image and article originally from www.benzinga.com. Read the original article here.