Paramount Global and Skydance have agreed on terms of a merger between the 2 entertainment firms that’s valued at $8 billion, based on a report.
Skydance, the media company founded by David Ellison, has agreed under the proposed take care of a Paramount special committee to pay $2 billion for Paramount’s parent company, National Amusements, which is controlled by majority stakeholder Shari Redstone, based on CNBC.
Paramount and Skydance have reportedly agreed to a merger valued at greater than $3 billion.
As a part of the deal, Skydance will buy out nearly half of Paramount’s class B shares for $4.5 billion, $15 apiece — giving shareholders a stake within the newly formed company, based on Faber.
Skydance, which has the backing of personal equity firms RedBird Capital and KKR, can even pay down Paramount’s debt by adding $1.5 billion in money to the studio’s balance sheet, based on CNBC.
Redstone, whose company owns 77% of sophistication A Paramount shares, must log out on the deal, which is able to not require a vote from the shareholders — a condition that was a part of the negotiations, based on CNBC reporter David Faber.
Paramount’s annual shareholder meeting will happen on Tuesday.
Shari Redstone is president of Paramount’s parent company, National Amusements. AFP/Getty Images
Skydance and Redbird will own two-thirds of Paramount while the remaining third can be controlled by class B shareholders.
Shares of Paramount were trading at greater than 7.4% higher just after the opening bell on Wall Street on Monday.
Skydance was founded founded by David Ellison. AFP via Getty Images
In total, the deal is valued at $8 billion — up from about $5 billion under earlier terms discussed between Paramount and Skydance. Previously, Redstone would have received lower than $2 billion for her stake, and the category B shareholders would have been bought out at $11 a share, CNBC previously reported.
In early May, Apollo and Sony had expressed interest in acquiring Paramount for about $26 billion and breaking up the corporate, CNBC previously reported. But Apollo and Sony reportedly have since backed off as Redstone favored a deal that may keep Paramount intact.
As negotiations have continued, Paramount’s C-suite also has been shuffled in recent months, with Bob Bakish stepping down as CEO in April. He was replaced by a trio of executives dubbed the “Office of the CEO.”
The three executives now in charge are CBS president and CEO George Cheeks; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, the pinnacle of Paramount Pictures and Nickelodeon.
