• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Editor's Pick Paramount and Skydance inch closer to a merger with one last big hurdle remaining
Editor's Pick

Paramount and Skydance inch closer to a merger with one last big hurdle remaining

by April 30, 2024
by April 30, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Paramount Global and Skydance Media are making progress on a deal that would merge the media companies and buy out controlling shareholder Shari Redstone.

Paramount Global’s special committee and David Ellison’s Skydance Media, backed by private equity firms KKR and RedBird Capital Partners, are narrowing in on how to value Skydance’s assets as part of a merger, as well as how much equity to add to the company as part of a recapitalization, according to people familiar with the matter.

The sides are close to agreeing on a value for Skydance. The entertainment company will be valued at around $5 billion and merged with Paramount Global, said the people, who asked not to be named because the discussions are private. Ellison and the private equity firms plan to raise roughly $4.5 billion to $5 billion in new equity. Some of that — about $2 billion — will be used to pay Redstone, and another substantial portion will be used to pay down debt.

The buyers would ideally like to get a deal done in May, said the people. Three of the people said that Paramount Global was slow to open a data room to the Skydance consortium, which has slightly pushed back the timeline on a deal. The exclusivity window on merger talks ends May 3, but the Skydance consortium wants to extend it by two weeks, said the people.

Skydance plans to name Ellison as CEO of Paramount Global and former NBCUniversal CEO Jeff Shell as the president, said two of the people. Current Paramount CEO Bob Bakish would depart the company, the people said.

Separately, Apollo and Sony have held preliminary discussions about teaming up for a deal that would buy out all Paramount Global shareholders at a premium, according to people familiar with the matter. The special committee hasn’t received concrete details on that offer and isn’t viewing it as a competitive bid to Skydance’s interest, two of the people said.

Still, the committee had more details on an initial offer made by Apollo, which it chose to ignore in favor of exclusive talks with Skydance. The special committee favored Skydance’s offer over Apollo’s in part because it offered shareholders future upside by keeping the company public with a cleaner balance sheet, one of the people said.

Spokespeople for Apollo, the Paramount Global special committee, Paramount Global, and Skydance’s consortium declined to comment.

One significant hurdle that remains is Paramount Global’s renewal agreement with Charter Communications for CBS and its cable networks. That deal is relevant to the value of Paramount Global, which could take a hit if Charter drops the networks or agrees to a lower carriage rate, the people said.

The deadline for that agreement is April 30. Paramount Global reports first-quarter earnings one day earlier, on April 29.

Paramount Global is still dependent on its traditional TV business, which accounts for about two-thirds of the company’s total revenue.

There are signs Charter could prove to be a tough negotiator with Paramount Global: Last year the cable provider, the second-largest in the U.S., briefly stopped carrying Disney’s networks when renewal negotiations between those two companies faltered. (The parties reached a deal 10 days later.)

Paramount’s cable networks are far less popular than Disney’s ESPN, which may put Bakish in a position of weakness.

The timing of the renewal and the deal talks set up an awkward dynamic, where Bakish, who would ultimately leave the company under a Skydance merger, will control Paramount Global’s fate with Charter.

Thus far, Bakish has always reached renewal deals with the major pay-TV distributors since taking over as CEO, dating back to his time running Viacom, beginning in 2016.

Bakish has privately argued against the Skydance deal because it dilutes common shareholders, according to people familiar with the matter. Several Paramount Global investors have also publicly written letters to the company’s board urging directors not to move forward with a Skydance deal, arguing it gives Redstone a massive premium for her controlling shares while leaving common shareholders out in the cold.

Under the terms of the deal, nearly 50% of the company will be owned by Skydance and its private equity partners, CNBC reported earlier this month. The rest of the company would be owned by common shareholders, and the company will continue to trade publicly.

“At Paramount, we’re always looking for ways to create shareholder value. And to be clear, that’s for all shareholders,” Bakish said during his company’s most recent earnings call in February.

Disclosure: NBCUniversal is the parent company of CNBC.

This post appeared first on NBC NEWS
You Might Also Like
  • Why Wall Street thinks Brian Niccol is the person to revive Starbucks — and end the Howard Schultz era
  • Detroit’s Big Three fight to dominate the next generation of the car industry
  • Smart electricity meter penetration rate in Europe reached 56 percent at the end of 2022
  • Trademark dispute emerges over Tiger Woods’ new logo
Share
0
FacebookTwitterPinterestWhatsapp

previous post
The new class war: A wealth gap between millennials
next post
SPY’s Pullback Continues: How To Know When It’s Over

You may also like

China says Tesla to fix software for 1.1 million vehicles...

May 15, 2023

Boeing CEO says China has stopped taking its aircraft amid...

April 23, 2025

How immigrants are helping boost the U.S. job market without...

April 7, 2024

Private equity firms circle Peloton for potential buyout

May 8, 2024

Warren Buffett gives away another $5.3 billion, says his children...

June 28, 2024

Affirm announces JPMorgan Chase merchants can now offer installment loans...

March 26, 2025

Volkswagen braces for showdown with unions after warning of possible...

September 4, 2024

Intelsat Expands Global Reach for Deutsche Telekom IoT

February 28, 2023

Biden administration to require advanced safety tech on all new...

April 30, 2024

Trump Media auditor charged by SEC with ‘massive fraud,’ barred...

May 5, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • OpenAI to release web browser in challenge to Google Chrome

      July 10, 2025
    • Sports executive charged with bid-rigging in Texas arena project

      July 10, 2025
    • How I Triple My Returns With 3x Leveraged ETFs!

      July 10, 2025
    • Want Faster, Lower Risk Trades? Use This Setup

      July 9, 2025
    • The Seasonality Trend Driving XLK and XLI to New Highs

      July 9, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,630 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,919 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,607 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,576 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,449 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,169)
    • Investing (538)
    • Stock (2,661)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • OpenAI to release web browser in challenge to Google Chrome

      July 10, 2025
    • Sports executive charged with bid-rigging in Texas arena project

      July 10, 2025
    • How I Triple My Returns With 3x Leveraged ETFs!

      July 10, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,169)
    • Investing (538)
    • Stock (2,661)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Trump Media lost $327.6 million in...

    May 22, 2024

    IMAX CEO expects $1.2 billion in...

    February 22, 2025

    Elon Musk’s X sues advertisers over...

    August 6, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here