David Ellison’s Skydance has reached a preliminary deal with Shari Redstone’s National Amusements to merge with Paramount, reviving a deal that had previously failed. The deal has been referred to Paramount’s special committee for review and approval. The proposed merger will see Redstone receiving a reduced consideration of $1.75 billion, with Skydance acquiring roughly half of Paramount’s controlling shares for $4.5 billion and contributing $1.5 billion towards Paramount’s balance sheet.
After the initial bid was killed in June, Redstone cited concerns about the proposed payment being reduced as the reason for ending the deal. The prolonged deal negotiations led to the departure of CEO Bob Bakish earlier in the year, resulting in a three-headed office of the CEO to run the company. Other interested bidders included a joint effort from Apollo and Sony, as well as an offer from Barry Diller, chairman of IAC and former Paramount executive.
The preliminary agreement has caused Paramount shares to surge by as much as 9%. The financial terms of the deal remain unchanged from previous reports, with Skydance offering to acquire a significant stake in Paramount for $15 per share. The deal has not yet been finalized, as the special committee is still in the process of reviewing and voting on the proposed merger. The story was initially reported by The New York Times and the Wall Street Journal, with contributions from CNBC reporters Lillian Rizzo, Alex Sherman, Rohan Goswami, and Julia Boorstin.
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