BENGALURU/LOS ANGELES - Members of Paramount Global’s board agreed on April 4 to enter into exclusive merger talks with Skydance Media, favouring the independent studio over a US$26 billion (S$35 billion) offer from Apollo Global Management, a person familiar with the matter said.
The deal talks, which are more advanced than those on the offer from the US private equity firm, are part of a two-step process that, if successful, would end Ms Shari Redstone’s control of the media empire built by her father, the late Sumner Redstone.
A special committee of Paramount’s board elected “to pursue the bird in hand”, rather than chase a deal “that might not actually come to fruition”, said the person with knowledge of the board’s action, adding that the period of exclusivity for discussions will run for 30 days.
Paramount’s shares on April 3 surged nearly 15 per cent after The Wall Street Journal first reported the exclusive negotiations with Skydance.
Skydance, led by Mr David Ellison – son of Oracle co-founder Larry Ellison – is seeking to buy National Amusements, the Redstone family’s holding company, which directly or indirectly owns about 77 per cent of Paramount’s voting class stock.
That sale is contingent upon Mr Ellison’s ability to merge Skydance and Paramount Global.
A special committee of Paramount’s independent directors has spent months in negotiations with Skydance, said the source, who added that the group’s advisors, Centerview Partners and the law firm Cravath, Swaine and Moore, recommended the parties enter exclusive talks in an attempt to reach a deal.
Skydance declined to comment. Paramount and National Amusements could not be reached for comment.
Apollo submitted its US$26 billion all-cash offer for Paramount Global over the weekend, according to three sources familiar with the terms of the bid.
All sources were not authorised to speak to media and declined to be identified.
This represents a substantial increase from a bid earlier in 2024 of US$11 billion for the crown jewel among Paramount Global’s media assets, its film studio. Paramount’s enterprise value at the end of 2023 was about US$22.5 billion.
Two people familiar with Apollo’s offer described it as “extremely preliminary”, noting that it was not the result of negotiations or diligence, but rather to “stall” any deal with Skydance.
A successful Skydance-Paramount deal would mark further consolidation in the media industry, where traditional television businesses have declined as audiences gravitate to video streaming services. The industry is also grappling with the impact of Hollywood’s labour strikes in 2023 and a soft advertising market.
Paramount Global has lost more than US$16 billion in value since it was formed through the hard-fought reunion of CBS and Viacom in 2019. The company’s market capitalisation fell below US$10 billion in January.
In January, a source said Mr Ellison was exploring an all-cash bid to acquire National Amusements. REUTERS
