Skydance, Redstone reach tentative deal on Paramount stake: BBG

Skydance Media has reached a tentative deal with Shari Redstone to sell her majority stake in Paramount Global (PARA), according to a report from Bloomberg. Paramount has an independent board of directors who will weigh in on the deal to make sure that it is the right deal for all Paramount shareholders.

Yahoo Finance Reporter Alexandra Canal joins Market Domination Overtime to break down the tentative deal between Redstone and Skydance.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

Editor's note: This article was written by Nicholas Jacobino

Video transcript

- Allie Canal is here with the latest.

- Yeah

- Really, for real this time.

- Well we'll see. Nothing's in stone yet but if you take a look at the stock, it closed up more than 15% today on the heels of this potential deal which is now being reported by multiple outlets. And based on this reporting, Paramount has agreed to enter exclusive merger discussions with Skydance Media for 30 days as these two sides attempt to work out the terms of a deal. But it's worth noting that the way Skydance wants to structure this will be a bit complicated.

Essentially, Skydance would purchase Shari Redstone stake in National Amusements, which is the holding company that operates Paramount Global and owns about 80% of the voting shares of Paramount. From there, it would then merge Skydance and its studio with Paramount Studios. So a 2-step deal there that would essentially create a media powerhouse that's at least the hope here.

Skydance has worked with Paramount Global before on different projects, including Top Gun Maverick, but I think the complex nature of this deal could be an issue. Paramount has an independent board of directors that's basically talking to all these different potential bidders here and the goal of that committee is to make sure that a deal is good for all Paramount shareholders, not just National Amusements. So that could potentially complicate things. Pricing is also going to be another question mark considering there are other players in this space here our parent company Apollo Global.

They earlier had offered $11 billion for Paramount Studio, but the Wall Street Journal reporting that just this past weekend, they upped that bid to $26 billion for the entire company, including debt. So that could perhaps feed into what we see from Skydance Media. It's just crazy because this company has a market cap of just over 9 billion, it got a little bit of a boost considering the share action that we saw earlier today. And you're having these private equity, investors, these different bidders offering more than $20 billion for this company, but again it all comes down to what Shari Redstone wants to do here.

- All right, story continues. Thank you Allie, appreciate it.