NEW YORK, April 12 (Reuters) - Hedge fund Barington

Capital on Friday urged Paramount Global ( PARAA ) to scrap its exclusive

merger talks with Skydance Media, arguing all shareholders would

benefit if the company looked at other potential bidders.

The New York-based hedge fund, which owns 325,000 shares in

Paramount, has joined a chorus of increasingly disgruntled

investors who say they are fearful of being cheated in a

potential deal that is widely seen as favoring the company's

controlling shareholder, Shari Redstone.

"We strongly object to the Special Committee's decision to

enter into an exclusivity agreement with Skydance - or any party

for that matter," Barington portfolio manager James Mitarotonda

wrote to the Paramount board. "By choosing not to negotiate with

other parties or permit them to conduct due diligence, the

Special Committee has effectively chilled the process."

Paramount entered into a 30-day exclusive negotiating period

with Skydance, the studio that partnered with Paramount Pictures

on such hits as "Top Gun: Maverick," as a special committee of

the board evaluates the possible acquisition of the smaller

independent studio in a stock deal worth $4 billion to $5

billion.

Skydance is negotiating separately to acquire National

Amusements (NAI), a company that holds the Redstone family's

controlling interest in Paramount, according to a person

familiar with the deal terms. That transaction is contingent

upon a Skydance-Paramount merger.

Mitarotonda, whose fund has pushed for changes at companies

ranging from toymaker Mattel ( MAT ) to restaurant owner

Bloomin' Brands ( BLMN ) to clothing company Chico's,

was especially critical of potential conflicts of interest and

self-dealing in the Skydance deal.

"Redstone is free to enter into any transaction for NAI that

she chooses on terms that she deems acceptable. However, the

board and the special committee cannot allow Ms. Redstone to

enter into a deal for NAI, where the completion of that deal is

contingent upon Paramount having to acquire another entity - in

this case Skydance - at a significant premium that is dilutive

to all other stockholders," he wrote.

The battle over the two companies' future comes only a week

after Walt Disney ( DIS ) fended off Trian Fund Management from

winning board seats and playing a role in directing

entertainment giant's future at a time companies are grappling

with how to integrate artificial technology and customers'

changing tastes in consuming media.

Instead, Barington urged Paramount to consider an approach

from private equity giant Apollo Global Management which has

expressed interest in buying Paramount for more than $26 billion

including debt. "Barington does not have a crystal ball, but the

Apollo offer appears simpler, cleaner and adequately value

enhancing given the numerous risks embedded in the Skydance

deal," the letter said.

Paramount declined to comment on the letter which was first

reported by Bloomberg.

Earlier this week larger investors, including Ariel

Investments and Gabelli Funds expressed their concerns.