April 7 (Reuters) - Skydance Media and Paramount

Global's ( PARAA ) $8 billion merger would be automatically

extended by 90 days after its deadline of April 7 under the

terms of the companies' agreement.

Paramount's controlling shareholder, Shari Redstone, struck

a two-step deal in July to sell her stake in the Hollywood

studio as part of the deal with David Ellison's Skydance, a

streaming-era upstart.

The companies are awaiting regulatory approval for the deal

to close. If the merger is not finalized by April 7 and certain

conditions are met, the agreement allows for up to two automatic

90-day extensions.

The closing of the deal is subject to approval by the

Federal Communications Commission.

A Delaware judge was willing to consider allegations in a

class action lawsuit that Paramount's sale to Skydance Media

should be blocked from closing because it short-changes public

shareholders, according to a court filing from March.

In January, an investor group known as Project Rise Partners

submitted a proposal valued at $13.5 billion to acquire

Paramount, but that was rejected by a special committee of

Paramount's board.

In response, pension funds for New York City employees that

own Paramount stock filed a class action lawsuit in Delaware's

Court of Chancery alleging that Paramount's special committee

breached its fiduciary duties to the company's public

shareholders by not considering the bid from Project Rise

Partners.

As part of the deal, Skydance had agreed to a 45-day "go

shop" period that allowed Paramount to solicit and evaluate

other offers. That period had ended on August 21.