Skydance is asking Paramount to end negotiations with Bronfman, the WSJ reports

(Reuters) – Skydance Media is accusing Paramount Global’s special board of directors of violating the terms of its agreement by extending the time period it can engage with other bidders, the Wall Street Journal reported on Thursday.

This comes after veteran media executive Edgar Bronfman Jr sweetened his takeover bid for Paramount, offering $6 billion for its controlling shareholder, National Amusements, and a minority stake in Paramount.

Bronfman’s competing bid threatens to scuttle a planned acquisition by tech scion David Ellison and his independent studio Skydance Media.

Shares of Paramount, home of Paramount Pictures, broadcast network CBS and cable networks such as MTV, fell 1.5 percent in extended trading.

“Although Skydance is not currently exercising its right to terminate the settlement agreement, we reserve the right to do so in the future,” Skydance’s lawyers said in a letter.

Paramount’s special board committee and a spokesman for Bronfman declined to comment. A spokesman for Skydance Media could not immediately be reached.

The board’s special committee extended the deadline from Aug. 21 to Sept. 5 for Bronfman’s consortium, Paramount said Wednesday.

If Paramount, controlled by Shari Redstone’s family business, accepts an offer Skydance doesn’t match, the media conglomerate would have to pay a $400 million breakup fee.

(Reporting by Jaspreet Singh in Bengaluru and Dawn Chmielewski in Los Angeles; Editing by Shilpi Majumdar)