Sony and Apollo Take Key Step in Bid for Paramount’s Assets

Sony and Apollo Take Key Step in Bid for Paramount’s Assets

Sony Pictures Entertainment and Apollo Global Management have taken a significant step forward in their efforts to take Paramount to court, three people familiar with the matter said Friday.

The two companies signed nondisclosure agreements with Paramount that allowed them to see Paramount’s nonpublic financial information, said the people, who spoke on condition of anonymity to discuss active negotiations. Paramount had previously shared materials with another suitor, Hollywood studio Skydance.

Earlier this month, Sony and Apollo Paramount submitted a non-binding expression of interest to acquire the company for $26 billion. The two wanted to buy Paramount for its studio and then sell other parts of its empire, which includes CBS, cable channels like MTV and the Paramount Plus streaming service.

But Sony shareholders are concerned about the potential takeover given the potential cost of a bid for Paramount and the headwinds facing its subscription streaming business. Sony and Apollo are currently considering various approaches to acquiring the company’s assets, but are diverging from their plan to make a $26 billion cash offer to Paramount, two of the people said.

Sony’s new vision for a deal could change the dynamic of Paramount’s efforts to sell itself or merge with another company. Paramount had previously rejected Sony’s offer to buy just its studio, and Paramount’s majority shareholder Shari Redstone has long been looking for a deal for the entire company.

A person familiar with Ms. Redstone’s thinking said that breaking up the company wouldn’t be a deal-breaker depending on the terms, but that she preferred to keep Paramount intact.

Ms. Redstone has agreed to a deal to sell her shares in National Amusements, Paramount’s parent company, to Skydance, but Skydance’s offer for the entire company faced significant resistance from Paramount’s common shareholders.

Paramount has missed an exclusive negotiating window with Skydance in recent weeks, but the two are still talking and Skydance remains interested in a deal.

The contract negotiations come at a turbulent time for Paramount. The company’s chief executive, Bob Bakish, resigned last month after more than a quarter-century with the company. He has since been replaced by three executives who ran an “Office of the CEO”: George Cheeks, the CEO of CBS; Chris McCarthy, chairman of Showtime and MTV Entertainment Studios; and Brian Robbins, the chief executive of Paramount Pictures.

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2024-05-18 00:00:51