Shari Redstone is playing M&A war games with removal of Paramount CEO Bob Bakish

The decision to remove Bakish as CEO comes as Paramount Global closes in on a merger agreement with Skydance Media. His departure could help force through a deal.

A number of large common shareholders, including Gamco Investors, Ariel Investments, Matrix and Aspen Sky Trust have publicly criticized the deal, arguing it destroys value for common shareholders. The Skydance offer would include billions of new equity that would dilute common holders.

Meanwhile, Skydance would pay about $2 billion to controlling shareholder Shari Redstone for her 77% voting shares in the company by acquiring her holding company National Amusements, CNBC has previously reported, marking a significant premium for Redstone, whose economic interest in the company has fallen to less than $1 billion.

The imbalance has led many at Paramount, including Bakish, to speak out against the deal, which they see as only benefitting Redstone.

“There’s no question I’d rather see no sale,” Gamco chairman and CEO Mario Gabelli told The New York Post earlier this month.

That’s where Monday’s CEO drama begins.

Redstone is now open to a so-called “majority of the minority” vote on the Skydance deal, according to a person familiar with her thinking. Bloomberg and The Wall Street Journal first reported the development on Sunday.

That’s a significant turn in the Skydance talks. It means minority shareholders will now have a say in whether the deal proceeds, giving the deal’s denouncers potential sway in the outcome. Paramount Global shares jumped about 5% in premarket trading Monday.

Typically, Paramount Global shareholders, such as Gabelli, would compare an offer to the standalone company’s prospects — hence his comments about not seeing a sale at all.

But by removing Bakish, Redstone and the Paramount Global board are now throwing the status quo into chaos. The company will no longer have a leader or a clear go-forward strategy. Redstone may be trying to force common holders to choose a sale by effectively destabilizing the company without one.

Exclusivity talks with Skydance are set to end May 3. CNBC reported last week Skydance was inching toward valuation terms but wanted a two-week extension on exclusivity, which the special committee hadn’t yet granted.

“National Amusements specifically requested that the Paramount board form a special committee to exercise their dependent judgment in considering a potential transaction with Skydance,” a National Amusements spokesperson said in a statement provided to CNBC. “National Amusements has no role on the committee, and we respect the committee’s process and ultimate decision on whether the Skydance deal presents an attractive transaction for Paramount and whether they want to continue to move forward.”

With a majority of the minority vote in place, Skydance plans to sweeten its offer to make it more appealing to common holders, Bloomberg reported. It’s unclear if the company will be able to alter terms drastically enough to convince common investors to change their minds.

A joint bid by private equity firm Apollo Global and Sony could serve as a white knight if investors don’t want Skydance and don’t have a viable non-sale option. The New York Times reported earlier this month the two parties have had preliminary talks on a deal.

Shareholders will wait to see if the parties present a formal offer with details about who is funding an acquisition. Regulators could view an acquisition by Apollo and Sony as more of a risk if funding is provided by foreign entities. Sony, too, is a non-U.S.-based company, which could theoretically trigger concerns related to the Committee on Foreign Investment in the United States, which would likely review the delay.

Meanwhile, Paramount has an important carriage renewal deal with U.S. cable company Charter Communications in the coming days. Bakish has been deep in negotiations with Charter. It’s unclear how his removal will affect those negotiations, which will play a large role in valuing the company moving forward.