Yahoo Finance Skydance Ups Cash Offer for Paramount and Courts Class B Stockholders in Restructured Offer
Skydance Media has increased its cash offer and restructured its bid for Paramount Global in an effort to make a deal more equitable for the media conglomerate’s minority shareholders, an individual familiar with the matter tells TheWrap.
The latest offer must be approved by Paramount’s independent special committee, which let the exclusivity window on its discussions with Skydance company expire with no deal last month. Following the decision, two individuals familiar with the matter told TheWrap that the two sides were continuing to explore a possible deal.
Specific terms of the bid could not immediately be learned. Representatives for Skydance and the committee declined to comment.
The move to sweeten the deal comes as some of Paramount’s class B shareholders have threatened to sue, arguing that David Ellison’s media company is prioritizing controlling shareholder Shari Redstone at the expense of the rest of the company’s investors.
Under the initial two-step plan, Skydance would acquire National Amusements before merging with Paramount to create a combined company valued at around $5 billion. An individual familiar with the plan previously told TheWrap that former NBCUniversal CEO Jeff Shell and Skydance’s chief creative officer Dana Goldberg and president Jesse Sisgold are expected to have major roles in the combined company. Skydance’s bid is backed by a consortium of investors, including RedBird Capital Partners, KKR, and Oracle co-founder Larry Ellison.
To assuage shareholder concerns, Skydance submitted a revised offer in April that included a $3 billion cash injection as well as premium sweetener for a percentage of non-voting Class B shares. That offer also considered having Redstone, who is already set to get a premium for her shares through National Amusements’ stake, take less cash and keep more equity in Paramount.
National Amusements currently controls approximately 77% of Class A voting stock and 5.2% of its Class B common stock.
In addition to Skydance, Sony Pictures Entertainment and Apollo Global Management submitted a joint $26 billion all-cash offer that would see the former take a majority take and operational control and the latter take a minority stake.
Under the terms of the initial non-binding expression of interest, Sony would be the significant majority shareholder with operational control, while Apollo would take a minority stake, an individual familiar with the matter previously told TheWrap. The bid followed a separate offer by Apollo to solely acquire Paramount Pictures, which was rebuffed. While the pair signed NDAs to begin discussions with Paramount, The New York Times reported that they have since backed away from the original offer.
Redstone has long been opposed to any deal for the company that breaks up its assets, though an individual familiar with her thinking previously told TheWrap that she is open to finding a deal in the best interest of Paramount shareholders and supports the independent special committee reviewing the Sony-Apollo bid.
Paramount also has the option of continuing to go it alone with its newly formed Office of the CEO, which replaced former Paramount CEO Bob Bakish.
On June 4, Paramount will hold its annual meeting of shareholders, where four board members — including three who are on the special committee — will step down. The company, which has a market capitalization of $8.3 billion as of Thursday afternoon, has seen its shares fall 16% year to date and in the past six months and 24% in the past year.
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