Shari Redstone, whose National Amusements owns a controlling interest in Paramount Pictures parent Paramount Global, is reportedly weighing up a modified takeover offer of around $8bn from David Ellison’s Skydance Media and his backers RedBird Capital.
On the eve of Paramount Global’s annual general meeting on Tuesday, CNBC reported that the latest offer would see Redstone receive $2bn for National Amusements, while Skydance would pay $4.5bn to buy out half of Paramount Global Class B shareholders at $15 per share.
Skydance and RedBird have reportedly offered to pay $1.5bn in cash to reduce Paramount Global debt.
The overall deal would result in Skydance and RedBird owning two-thirds of Paramount Global, with Class B shareholders owning the balance. Those shareholders would not get to vote on the deal – Redstone has the power to approve or veto.
A Paramount Global special committee has reportedly accepted the offer in principle. Paramount Global and Skydance had not responded to requests for comment at time of writing.
“We received the financial terms of the proposed Paramount/Skydance transaction over the weekend, and we are reviewing them,” a National Amusements spokesperson told press.
The deal is by no means a fait accompli and follows a lapsed exclusive negotiating window with Skydance and RedBird.
Since then, private equity giant Apollo Global Management and Sony Pictures have stepped up their joint offer, increasing an initial $11bn bid for Paramount Pictures to a $26bn offer for Paramount Global.
Redstone is averse to that deal, as are members of Hollywood’s creative community. Were Sony to gobble up Paramount it would reduce the number of autonomous Hollywood studios from five to four and leave film and television creators with one fewer buyer to whom they could pitch projects.
In an election year it remains to be seen how aggressively US regulators will scrutinise potentially anti-competitive transactions after voters go to the polls in November.
Potential flashpoints include Sony’s ownership by a Japanese parent. Additionally, the Federal Communications Commission’s national media ownership rules prohibit one entity from owning TV stations that reach more than 39% of US households. Apollo holds a stake in Cox Media Group, which owns TV channels, and were it to acquire Paramount Global it would add CBS to its portfolio.
Tuesday will also see another potentially significant development. After Paramount Global CEO Bob Bakish was fired in late April, Redstone unveiled an office of the CEO comprising Paramount Pictures head Brian Robbins, CBS head George Cheeks, and Showtime/MTV Entertainment Studios and Paramount Media Networks head Chris McCarthy.
The hastily-convened triumvirate said little of note in a comically cryptic Q1 earnings call. Observers expect more substance in Tuesday’s meeting. Paramount Global will host a town hall on Wednesday for employees.
Paramount Global shares climbed 7.47% on Monday.
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