Paramount and Skydance agree to terms of the deal, Shari Redstone disagrees

Paramount Global’s months-long merger and acquisition drama may soon be over.

A special committee established by Paramount Global’s board to evaluate merger and acquisition proposals has reached an agreement with David Ellison’s Skydance Media and his private equity backers on the terms of a complex deal that would merge Skydance and Paramount while keeping Paramount publicly traded. diverse He confirmed it. Skydance and its partners, RedBird Capital and KKR, have improved the original takeover offer to make it more attractive to Paramount Global’s non-voting shareholders.

Now, the deal awaits approval from Shari Redstone, non-executive chairman of Paramount Global, which owns National Amusements Inc. 77% of the voting shares in Paramount Global. Redstone has not formally decided whether or not to go ahead with the deal — and the terms of the Skydance-NAI portion of the agreement have yet to be determined, the sources said. If she agrees, it would end her family’s decades-long control over the media group and its predecessor companies.

The Skydance-Paramount merger will not require approval by Paramount’s Class B shareholders.

Upon hearing news that the Skydance-Paramount deal may be nearing the finish line, the price of Paramount Global’s Class B shares traded up 7.5% on Monday to about $12.80 per share. New details of the terms of the Skydance deal were reported earlier by Wall Street Journal And CNBC.

Representatives for Skydance, Paramount Global and a special committee of Paramount’s board of directors declined to comment.

An NAI representative said in a statement to diverse“We received the financial terms of the proposed Paramount/Skydance transaction over the weekend and are reviewing them.”

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Under the new offering from Skydance-RedBird-KKR, Paramount Class B shareholders will be able to sell just under half of their shares for $15 per share and the remainder of their shares will be converted into shares in the newly combined Paramount-Skydance. According to sources.

The agreement proposes that Skydance will acquire NAI shares for approximately $2 billion in cash, thus assuming control of Paramount Global. Skydance will merge with Paramount, valuing Skydance at less than the previous figure of $5 billion under the previous bid, at which point Skydance-RedBird-KKR will own about two-thirds of the combined Paramount-Skydance company (and legacy Class B shareholders Paramount Global will own the rest). Skydance and its financial partners will also pay Paramount $1.5 billion in cash, with the goal of helping Paramount reduce its $15 billion in debt.

Paramount Global holds its 2024 annual shareholder meeting on Tuesday (June 2) starting at 9 a.m. ET, but the deal with Skydance is unlikely to officially close by then.

After Redstone and Skydance failed to reach an agreement on Skydance’s previous bid, Sony Pictures and private equity giant Apollo Global Management emerged as potential bidders for Paramount Global, but have since backed away from their $26 billion all-cash offer to buy the entire company. The Sony-Apollo bid would face a number of regulatory hurdles, including requiring a separate ownership structure for CBS-owned television stations.

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