Skydance’s latest offer opens the door to rivals
LOS ANGELES: Paramount Global chairperson Shari Redstone is unhappy with Skydance Media’s reduced offer for the family’s controlling stake in the company, opening the door for rival bidders to make their case, say two sources familiar with the matter.

Over a months’ long pursuit of a deal with Paramount, Skydance chief executive officer (CEO) David Ellison reduced his initial US$2.5bil offer for National Amusements, which holds the Redstone family’s Paramount stake, to provide additional cash for the company’s non-voting shareholders, according to one source familiar with the process.

In a later offer submitted last week, Ellison created more cash for shareholders by reducing Skydance’s valuation of the merger to US$4.75bil from US$5bil, according to that source.

Redstone was displeased with that revaluation, according to the two sources – creating an opportunity for others interested in buying National Amusements.

Among them, Hollywood producer Steven Paul began lobbying the Redstone family to consider his offers over a sale to Skydance, one of the sources said.

Though one of the sources added that Redstone would always have been obliged to consider all offers for National Amusements.

Both sources spoke on condition of anonymity.

Spokespeople for Skydance and Redstone declined to comment. A spokesman for a Paramount special committee, which has been evaluating options for the company, also declined to comment.

Paramount shares were down 4.6% in late Tuesday trading.

The company’s fortunes have waned as its traditional television business has declined while the streaming video service it launched to capture audiences has yet to recover lost revenue.

The latest twist in deal talks came with Paramount’s annual shareholder meeting in the background.

Addressing shareholders, Paramount’s co-CEOs put forth a restructuring plan that includes US$500mil in annualised cost cuts, potential asset sales and a possible joint venture or other partnerships for its Paramount+ streaming service.

The new Paramount triumvirate – CBS president and CEO George Cheeks, Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios, and Paramount Pictures president and CEO Brian Robbins – have led the company since the exit of former boss Bob Bakish in April, who left amid growing tensions with Shari, Paramount’s controlling shareholder.

Paramount said it rescheduled yesterday’s planned employee town hall for June 25, citing ongoing speculation about a potential deal.

“We want to be able to speak to you with as much candor and transparency as possible,” the company’s co-CEOs told employees in a note.

“By moving the date, our hope is to do just that.”

Redstone endorsed the co-CEOs and their plan to better capitalise on the company’s wealth of content and reduce costs to strengthen its balance sheet.

“They are each experienced, respected leaders within our company, in our industry, and they have been behind our biggest successes for years,” she said on Tuesday.

The shareholder meeting was the first time the three executives publicly addressed investors as a group.

Paramount has shed about US$18bil in market value since December 2019, when Redstone reunited two halves of the family’s media empire, CBS and Viacom.

One source close to Redstone said the sale of a media conglomerate built by the late Sumner Redstone, has been an emotional process and one which will require some time to evaluate.

In April, Paramount entered into exclusive merger talks with Skydance Media, but allowed that period of exclusivity to lapse as it evaluated a rival nonbinding offer letter from Sony Pictures Entertainment and Apollo Global Management.

Under the terms of the latest offer from Skydance, Paramount would acquire the independent studio in an all-stock transaction valued at US$4.75bil, according to one person familiar with the negotiations.

Skydance and its deal partners, RedBird Capital and KKR , would infuse Paramount with at least US$1.5bil in fresh capital to be used to pay down debt, and offer to purchase 40% of Paramount’s non-voting class B stock at US$15 a share, said the source, who spoke on condition of anonymity.

In a related transaction, Skydance would acquire privately held National Amusements, which owns movie theaters in the United States, the United Kingdom and Latin America, and holds 77% of Paramount’s class A voting stock, representing the Redstone family’s controlling interest in the company.

The more than US$2bil deal for National Amusements would give Skydance CEO Ellison voting control over the larger media company, setting the stage for the merger. — Reuters
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Paramount Global chairperson Shari Redstone is unhappy with Skydance Media’s reduced offer for the family’s controlling stake in the company, opening the door for rival bidders to make their case, say two sources familiar with the matter.