Of highest importance and Skydance have agreed to terms of a merger, CNBC’s David Faber reported Monday. A deal could be announced in the coming days, he said.
A special Paramount committee and the buying consortium – David Ellison’s Skydance, backed by private equity firms RedBird Capital and KKR – agreed to the terms. The deal is awaiting signing by Paramount majority shareholder Shari Redstone, who owns National Amusements, which owns 77% of Paramount’s Class A shares, Faber said Monday.
The contract terms come after weeks of discussions and a current competitive offer from Apollo Global Management and Sony Pictures.
“We received the financial terms of the proposed Paramount/Skydance transaction over the weekend and are currently reviewing them,” a National Amusements spokesperson said.
The deal currently calls for Redstone to receive $2 billion for National Amusements, Faber reported Monday. Skydance would buy out nearly 50% of Paramount’s Class B shares for $15 apiece, or $4.5 billion, leaving holders with equity in the new company.
Skydance and RedBird would also contribute $1.5 billion in cash to Paramount’s balance sheet to help reduce debt.
After the deal closes, Skydance and RedBird would own two-thirds of Paramount, and Class B shareholders would own the remaining third of the company, Faber reported. The negotiated terms were previously reported by the Wall Street Journal.
Faber reported that the deal does not require a shareholder vote, which was part of the negotiations. Paramount’s annual shareholder meeting is Tuesday.
The deal is valued at $8 billion, an increase from the $5 billion offer previously on the table. Under those previous terms, Redstone would have received less than $2 billion for its stake, and the Class B shareholders would have been bought out at a nearly 30% premium at $11 per share, CNBC previously reported.
No announcement of the deal is expected before the meeting, said people familiar with the matter, who asked not to be named because the discussions are private. In addition to the twists and turns in negotiations with buyers, Paramount’s executive leadership has also experienced upheaval in recent months.
Bob Bakish resigned as CEO at the end of April and was replaced by what the company calls the “CEO’s office.” Paramount is now led by three executives: George Cheeks, president and CEO of CBS; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, the head of Paramount Pictures and Nickelodeon.
They want to present strategic priorities at the annual meeting on Tuesday. There will be a previously scheduled board meeting later Tuesday where the interim leaders will be present again, the people said. Redstone approved of the Triumvirate’s ideas and leadership during his brief tenure, one of the people said.
In early May, Apollo and Sony officially expressed interest in acquiring Paramount for around $26 billion, CNBC previously reported. However, Redstone favored a deal that would keep Paramount together, and Apollo and Sony planned to break up the company, CNBC previously reported.
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2024-06-03 19:22:10
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