(Bloomberg) -- Paramount Global’s controlling shareholder Shari Redstone has a tough decision looming: whether to let other stockholders have a say if she agrees to sell her family’s holdings to producer David Ellison and merge the film and TV giant with his Skydance Media.

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The Redstones own less than 10% of Paramount but control 77% of the voting stock in the company, the parent of CBS, MTV and other media businesses. There’s no requirement that they get approval for a deal from all of Paramount’s investors, but securities law provides a way for a company to avoid costly shareholder litigation by giving everyone a chance to weigh in.

“We think it should,” said William Riley, an attorney for Paramount investor Russell Weiner, founder of energy-drink maker Rockstar. Riley sent Redstone a letter last week saying it appeared a transaction was being done for her “personal gains” and that other shareholders were being forced into a “speculative business arrangement that was never contemplated at the time of making their investment decisions.”

This month in Delaware, where Paramount is incorporated, the state high court ruled in a case involving Match Group Inc. that deals involving a controlling shareholder who reaps a disproportionate benefit should be conditioned on approval by a special committee of independent directors and a vote by noncontrolling shareholders. Absent both of those, company directors have to work harder to prove a transaction was fair to everyone if they get sued.

“A vote by minority stockholders may be offered in order to obtain a more deferential standard of judicial review,” said Lawrence Hamermesh, the former executive director of the Institute for Law & Economics at the University of Pennsylvania and an expert on Delaware law.

Although the Redstones and Paramount’s board haven’t committed to a deal yet, the terms being discussed include Ellison and his partners buying the family’s holdings for about $2 billion and then merging Skydance into Paramount at a valuation of some $5 billion, according to people familiar with the talks.

That proposal doesn’t sit well with some Paramount investors, including billionaire money manager Mario Gabelli and Barington Capital Group LP, which said the company should consider options that benefit all shareholders, not just the Redstones. Sony Group Corp and Apollo Global Management Inc. have had discussions about a joint bid for the company.

Paramount’s shares jumped 10% Friday to $12.06 on news of the potential bid by Sony and Apollo.

The Redstones and Paramount’s board haven’t decided whether nonvoting shareholders will get a say, according to people familiar with their thinking. A spokesperson for the family declined to comment. Most of Paramount’s stock is held by investors who have no say on matters like board membership, unlike most other publicly traded corporations.

There is precedent for media moguls giving investors with limited voting rights a say in deals.

The bylaws at News Corp. and Fox Corp. require that nonvoting shareholders be asked to approve big mergers. When controlling investor Rupert Murdoch proposed recombining the companies two years ago, he went a step further, saying he wouldn’t go forward with a deal unless a majority of non-Murdoch investors approved. Ultimately, the companies dropped plans to recombine before getting that far.

In 2007, independent shareholders of Cablevision Systems rejected a takeover of the company by the controlling Dolan family. Only non-family members were allowed to vote.

The Redstones didn’t give nonvoting investors similar consideration when CBS Corp. and Viacom Inc. recombined in 2019. CBS board members unsuccessfully went to court to block that deal. Investors in both companies sued after the fact, and Paramount ended up settling for $290 million.

A Paramount deal, such as the one being considered with Skydance, will likely also end up in court, according to Charles Elson, a retired University of Delaware professor who founded the school’s Weinberg Center for Corporate Governance.

“That’s the problem with dual-class stock,” Elson said. “Dual class, it was argued, gave the genius power. But if the genius dies, and the child of the genius comes in, it really leaves the minority shareholders out in the cold.”

(Updates with share gain in eighth paragraph.)

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