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Skydance Media and National Amusements Move Toward Merger with Paramount Global
Independent film and TV producer Skydance Media has taken a significant step towards acquiring Shari Redstone’s National Amusements Inc. and merging with Paramount Global, which owns CBS and MTV. This development follows the breakdown of previous talks between Skydance and National Amusements last month. The parties renewed discussions last week, intensifying on Tuesday.
Deal Review and Revised Terms
The preliminary agreement will be reviewed by a special committee of Paramount directors, as confirmed by an unnamed source familiar with the matter. The new terms of the deal propose a higher valuation for National Amusements and stronger protections against potential litigation affecting the Redstone company. Sellers have a 45-day window to seek better offers.
Despite the heightened momentum, the deal's announcement, expected within days, is not guaranteed. Nonvoting shares of Paramount rose by as much as 10% to $11.83 in after-hours trading following the news.
Financial Implications and Stakeholders
Previously, a proposed transaction led by David Ellison of Skydance, along with RedBird Capital Partners and KKR & Co., offered $2.25 billion for National Amusements and an additional $1.5 billion to help alleviate Paramount's debt, which currently exceeds $14 billion. Collectively, Ellison’s group would inject $4.5 billion, potentially providing vital support for Paramount amidst struggling performance amid the transition from traditional media to streaming platforms.
Notably, during prior discussions, Class B non-voting shareholders of Paramount were set to receive $15 per share, and non-Redstone family Class A shareholders were to be compensated $23 per share.
Parallel Negotiations
In a related move, Paramount is engaged in exclusive talks to sell its Black Entertainment Television (BET) network. Potential buyers include BET CEO Scott Mills and Chinh Chu of CC Capital, contemplating an offer estimated between $1.6 billion to $1.7 billion.
This acquisition and the ensuing financial maneuvers hold substantial implications for Paramount Global, particularly as the company grapples with ongoing net losses, highlighted by a $554 million deficit in the first quarter. The strategic infusion of capital proposed by Ellison and his partners could provide a critical turnaround for the media giant.
Developing Story
Paramount Global, Skydance Media, and National Amusements have not commented on the evolving situation. Updates on this potential merger and associated transactions are expected as talks progress and additional details emerge.
