Paramount Global Shares Surge on Skydance Media DealParamount Global Shares Surge on Skydance Media Deal Shares of Paramount Global experienced a significant 6.5% increase on Wednesday following reports of a preliminary agreement between National Amusements and David Ellison’s Skydance Media. The deal involves the sale of National Amusements’ majority stake in Paramount. According to sources, Skydance would acquire National Amusements for $1.75 billion, granting them control of 77% of Paramount’s voting shares. The Wall Street Journal reports that the deal includes a 45-day “go-shop” period where other bidders may present offers. CNBC reports that Skydance intends to purchase 50% of Paramount’s non-voting shares at $15 per share. Paramount shares currently trade at $11.42. In addition to Skydance, potential bidders include film producer Steven Paul, Seagram heir Edgar Bronfman Jr., and IAC’s Barry Diller. Sources suggest that these parties may not withdraw their interest, as they could potentially offer more lucrative terms for Paramount shareholders or Shari Redstone personally. The Skydance deal has been referred to a special committee of Paramount’s board of directors for review. Notably, the proposed arrangement does not require the merger with Paramount to be approved by non-Redstone shareholders, a previously contentious issue. The sale marks the first phase of a potential two-phase transaction leading to a merger between Skydance and Paramount, home to the Paramount film studio, CBS, and cable networks like MTV and Nickelodeon. Skydance, co-founded by Larry Ellison’s son, David Ellison, has collaborated on Paramount films such as “Top Gun: Maverick” and “Star Trek Into Darkness.” The deal would see Skydance become the majority shareholder of Paramount. Paramount declined to comment on the potential agreement, and a spokesman for the special committee was unavailable for comment. The transaction stems from months of discussions between Ellison and Redstone, daughter of media mogul Sumner Redstone. Despite an initial offer rejection, National Amusements reignited discussions with Skydance alongside other interested parties. Redstone reportedly recognizes the strategic value in combining Paramount and Skydance. National Amusements, owned by the Redstone family, operates movie theaters globally and holds a majority stake in Paramount.
Shares of Paramount Global rose 6.5% on Wednesday after reports that Shari Redstone’s National Amusements had reached a preliminary agreement to sell its majority stake in the storied media company to David Ellison’s Skydance Media.
Skydance would pay $1.75 billion for National Amusements, which owns 77% of Paramount’s voting shares, three sources familiar with the matter told Reuters on Tuesday.
Paramount declined to comment on a possible deal with Skydance. SOPA Images/LightRocket via Getty Images
According to the Wall Street Journal, which first reported the news, the deal includes a 45-day “go-shop” period during which other bidders could submit offers.
CNBC reported Wednesday that Skydance would buy 50% of the media company’s non-voting shares for $15 per share.
Paramount’s shares traded at $11.42.
Others who have expressed interest in acquiring National Amusements include film producer Steven Paul, Seagram heir Edgar Bronfman Jr. and IAC’s Barry Diller.
A source with ties to one potential bidder told Reuters that the others are unlikely to abandon their efforts, in part because they may make a bid that is more lucrative for Paramount shareholders or Redstone personally.
National Amusements has referred the Skydance deal to a special committee of Paramount’s board of directors for review, two people familiar with the matter said. Under the new arrangement,
National Amusements is not requiring the merger with Paramount to be approved by a majority of non-Redstone shareholders, a previously thorny issue, the Wall Street Journal reported.
If the deal becomes reality, Skydance will become the majority shareholder. Los Angeles Times via Getty Images
The sale is seen as the first part of a two-phase transaction that would see the smaller, independent studio Skydance merge with Paramount, home to the eponymous film studio, CBS and cable networks including MTV and Nickelodeon.
The century-old Paramount Pictures is known for films such as “Titanic,” “The Godfather” and the “Transformers” franchise. Skydance has co-produced Paramount films such as “Top Gun: Maverick” and “Star Trek Into Darkness.”
Paramount declined to comment on a potential deal with Skydance. A spokesman for the special committee was not immediately available for comment.
Ellison, the son of Oracle co-founder Larry Ellison, had been pursuing Paramount for months, a combination that Redstone, daughter of the late media mogul Sumner Redstone, enthusiastically embraced, according to multiple sources. But she called off the deal after Skydance adjusted its offer to offer more money to other shareholders.
Sumner Redstone turned down an earlier offer from Skydance. Patrick McMullan via Getty Images
National Amusements has reached out to Skydance again in the past week, while the company is also in discussions with other interested parties, a source familiar with the discussions said.
According to the source, Redstone always saw strategic value in the combination of Paramount and Skydance.
National Amusements owns movie theaters in the United States, the United Kingdom and Latin America and owns 77% of the voting shares of Paramount, which is owned by the Redstone family.
