Investing.com — Paramount Global's (NASDAQ:PARA) announcement Monday that CEO Bob Bakish is stepping down as the company’s Board, steered by Chair Shari Redstone, continues to pursue a merger with Skydance, is attracting negative criticism from shareholders and market participants who overwhelmingly view the decision as a move against the interest of the company.
Commenting on his exit, Bakish said in a note on LinkedIn earlier today:
In an exclusive conversation with Investing.com’s Thomas Monteiro, David Katz, President and CIO of Matrix Asset Advisors, one of the more outspoken shareholders of Paramount, expressed his dismay at what he sees as Redstone’s firing of Bakish and the costs this is likely to impose on the company.
“This is a major unforced error that will cost the company upwards of $50M according to reports, plus a massive lack of leadership during a critical period for the company. Bakish was fired because he was fighting for an equitable deal for all shareholders rather than for doing a one-sided deal for Redstone at the expense of the other 90% of the shareholders," said Katz, adding that, "Bakish being fired was solely driven by Shari Redstone because he wouldn’t roll over and say the deal was a good deal. His exit puts the company in a greater crisis and forces the Board’s hand to do something as they no longer have a world-class CEO.”
He added that the earnings call which provided no opportunity for analysts to pose questions to the Board further proves that the deal with Skydance makes no sense and that a full and open sale process would result in a better price for shareholders, especially given that the turnaround is seeing results.
“The current quarter’s performance should make Paramount more attractive to Sony/Apollo.It reinforces our belief that going it alone and letting the turnaround take place is a lot better for shareholders than a fire sale to Skydance now,” added Katz.
“If the Board consummates a deal with Skydance, there will be lawsuits from many others.”
Meanwhile, Matrix Asset Advisors remains hopeful that shareholder frustration with Redstone will expedite a deal with Sony (NYSE:SONY)/Apollo (NYSE:APO), with Skydance’s exclusivity period set to end on Friday, May 3.