Paramount Global, Skydance Media merger deadline to get 90-day extension

(Reuters) - Skydance Media and Paramount Global's $8 billion merger would be automatically extended by 90 days after its deadline of April 7 under the terms of the companies' agreement.

Paramount's controlling shareholder, Shari Redstone, struck a two-step deal in July to sell her stake in the Hollywood studio as part of the deal with David Ellison's Skydance, a streaming-era upstart.

The companies are awaiting regulatory approval for the deal to close. If the merger is not finalized by April 7 and certain conditions are met, the agreement allows for up to two automatic 90-day extensions.

The closing of the deal is subject to approval by the Federal Communications Commission.

A Delaware judge was willing to consider allegations in a class action lawsuit that Paramount's sale to Skydance Media should be blocked from closing because it short-changes public shareholders, according to a court filing from March.

In January, an investor group known as Project Rise Partners submitted a proposal valued at $13.5 billion to acquire Paramount, but that was rejected by a special committee of Paramount's board.

In response, pension funds for New York City employees that own Paramount stock filed a class action lawsuit in Delaware's Court of Chancery alleging that Paramount's special committee breached its fiduciary duties to the company's public shareholders by not considering the bid from Project Rise Partners.

As part of the deal, Skydance had agreed to a 45-day "go shop" period that allowed Paramount to solicit and evaluate other offers. That period had ended on August 21.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Maju Samuel)