With Paramount's fate hanging in the balance, a powerful suitor has upped the ante.
Skydance, which has been in talks for months to merge with Paramount, has proposed in recent days a $3 billion cash injection into the combined company that could be used to repay debt and buy back stock, two people familiar with the matter said. It is said that he did. suggestion. Skydance also proposed giving Paramount shareholders more stock in the combined company than originally proposed.
The revised bid is aimed at reassuring investors who have opposed the deal in recent weeks as enriching Paramount's controlling shareholder Shari Redstone at the expense of other investors.
People familiar with the process said the Skydance deal could still fall apart due to strong investor opposition and the complex nature of the deal. Paramount's special committee has been discussing the transaction, which is subject to approval by a majority vote of minority shareholders.
Paramount has been negotiating a deal with movie studio Skydance for months since Mr. Redstone decided late last year to consider selling his media empire. Since then, the company has attracted interest from suitors including private equity giant Apollo and proposed merger with Skydance.
Skydance is offering to buy Paramount stock at a premium in hopes of further placating investors, one of the people said. Redstone's shares were expected to command a premium because he already controlled them. One option currently being discussed is that Skydance could ask Redstone to receive less cash and retain more Paramount stock as part of the deal.
Under the terms of the new deal, Paramount's shareholders will include Redbird, one of Skydance's biggest backers, and the family of David Ellison, Skydance CEO and son of Oracle founder Larry Ellison. The company will receive an investment of $3 billion from Skydance, the media company founded by the young Ellison, already has a relationship with Paramount and has helped produce such hits as “Top Gun: Maverick'' and “Mission: Impossible: Dead Reckoning.''
Paramount declined to comment.
Negotiations are likely to now focus on how the infusion will be used. The special committee of Paramount's board of directors negotiating this deal is focused on achieving the best deal for all shareholders, and is directing most of its cash to shareholder returns, including share buybacks at favorable prices. They want to use it to provide incentives. Skydance hopes to use most of the cash injection to pay down debt, putting the combined company on a stronger financial footing. The company's high debt was recently downgraded, and both companies are focused on ensuring balance sheet strength.
Skydance's lenient proponents are entering a delicate phase of negotiations. The deadline for Skydance to negotiate exclusively with Paramount is approaching, putting pressure on Skydance to make its best case for a merger with Paramount. Paramount's special committee asked for improved conditions last week, and Skydance complied over the weekend.
Skydance, on the other hand, tried to meet all the demands of Paramount's special committee, but the two companies never saw the light of day.
Paramount is dealing with top-tier disruption. Redstone's relationship with Paramount CEO Bob Bakish has soured, and he is expected to resign this week. To replace Bakish, Paramount will create an “Office of the CEO” run by three department heads: Brian Robbins, head of Paramount Picture Studios; I am considering doing so. George Cheeks, CEO of CBS. Chris McCarthy, president of Paramount's entertainment and youth brands;
