Time is running out for Paramount Global and Skydance Media to reach a deal to combine their entertainment empires during a 30-day exclusive negotiation period that ends Friday, with the week likely to end without a deal being reached. It seems to be highly sexual.
Paramount, run by Shari Redstone, and Skydance, led by film producer David Ellison, are finalizing a complex deal that would give Ellison control of the storied media giant. And so far no agreement has been reached.
What for years looked like Paramount Global's most viable takeover option has been beset by investor revolts, corporate restructuring, and the subject of weeks of palace intrigue. Paramount stock fell about 6% on Friday after reports that the company was uninterested in Skydance's offer.
New York-based research firm LightShed Partners said Friday that it expects separate bids from Sony Pictures Entertainment and Apollo Global Management and a negotiation deadline to arrive without a deal. .
The newspaper has contacted Paramount Global for comment. A spokesperson for Paramount's Mergers and Acquisitions Committee declined to comment.
skydance scenario
The situation comes after reports surfaced in January that Ellison's Skydance Company was considering an all-cash deal to acquire National Amusements, which owns 77% of Paramount Global's voting stock. is confusing.
Last month, Paramount continued negotiations with Skydance, which partnered with investment firms Redbird Capital and KKR to acquire National Amusements and acquire the broadcast network's Melrose Avenue film studio Paramount Pictures. The company will gain control of Paramount, the owner of the company. CBS, cable channels MTV, Nickelodeon.
The talks spurred an investor-led revolt at Paramount Global, raising concerns that the deal in question would greatly benefit Redstone, Paramount's non-executive chairman, at the expense of public shareholders. did.
An investor revolt caused Paramount's stock to plummet, and several company directors resigned. To quell the backlash, Skydance recently upped its offer by injecting cash into Paramount and setting aside funds specifically for Paramount's non-voting shareholders, which would likely reduce Redstone's share. It will decrease.
All of this corporate turmoil culminated Monday with the firing of Paramount Global CEO Bob Bakish, whose opposition to the Skydance deal didn't sit well with Redstone.
Mr. Bakish favors another suitor for Paramount Global, private equity firm Apollo Global Management, which this week submitted a $26 billion all-cash bid for the entertainment empire in partnership with Sony Pictures Entertainment. .
Sonny and Apollo hover around the hoop
While this Paramount and Skydance saga unfolded, Apollo and Sony officially entered the ring as a team.
Culver City-based Sony offered to become the entertainment company's majority shareholder, with Apollo as a minority shareholder.
Because Sony is based in Tokyo, Apollo would have to take over control of Paramount's CBS network to comply with Federal Communications Commission rules restricting foreign ownership of broadcast television stations. However, technically this proposal may become less attractive for companies. LightShed analysts say the company is reluctant to divest its assets.
While such a deal would be clean from a financial standpoint, it would cause havoc in Hollywood. It will likely lead to mass layoffs, reducing the number of major movie studios from five to four.
What if none of the above?
Following Mr. Bakish's firing, Paramount Global replaced three top entertainment executives, Paramount Pictures CEO Brian Robbins, CBS CEO George Cheeks, and Showtime/MTV Entertainment Studios head Chris McCarthy as “CEOs.” He was appointed to lead the company in the capacity of “Office of the Company''.
Analysts at Lightshed Partners say that if the Paramount-Skydance merger fails, Paramount will move forward with a management triumvirate and focus on restructuring its business, with an eventual deal expected to occur later this year or in 2025. We expect that the merger and acquisition discussions will be revisited in the coming months. More will become clear after the 2024 presidential election.
Lightshed analysts suspect that if negotiations with Skydance break down, Paramount will quickly move on to the Sony-Apollo deal.
“It's only been four days, so there's not much I can say,” Cheeks wrote in a memo to Paramount Global staff. “However…Brian, Chris, and I are finalizing a strategic plan and plan to roll it out as soon as possible.”
Times staff writers Samantha Masunaga and Meg James contributed to this report.