24hoursworld

Paramount and Skydance confirm their merger after a multi-million dollar deal

Skydance Media and Paramount Global have agreed to merge, the companies announced late Sunday, opening a new chapter for one of Hollywood’s oldest studios.

The companies agreed to a two-phase process in which Skydance and its partners will acquire National Amusements, which owns the Redstone family’s majority stake in Paramount, for $2.4 billion in cash. Skydance will then merge with Paramount, offering $4.5 billion in cash or stock to shareholders and adding another $1.5 billion to Paramount’s balance sheet.

The agreement represents the end of an era for Shari Redstonewhose father and late patriarch, Sumner Redstonetransformed the family chain of drive-in theaters into a media empire that included Paramount Picturesthe television network CBS and cable television networks Comedy Central, Nickelodeon and MTV.

“Given the changes in the industry, we want to strengthen Paramount for the future, while ensuring that content remains king,” Redstone, chairwoman of Paramount and National Amusements, said in a statement, citing a phrase coined by her father.

The merger would combine Paramount, responsible for classic films such as “The Godfather”, “Chinatown” and “Breakfast at Tiffany’s”with his financial partner on several major recent films, such as “Top Gun: Maverick,” “Mission: Impossible: Death Sentence” and “Star Trek: Into Darkness”David Ellison, the 41-year-old tech mogul who founded Skydance, will serve as a board member and chief executive of the new Paramount. Jeff Shell, the former chief executive of NBCUniversal, will be its new chairman.

The merger process between Paramount and Skydance

Ellison, son of Oracle co-founder Larry Ellisonwill inherit a media company that has a mountain of challenges as it navigates an entertainment business upended by the streaming video revolution. Paramount has lost nearly $17 billion in value since the end of 2019, while its traditional television business has eroded faster than its Paramount+ streaming service could generate profits.

There have been tensions in the executive offices. Its chief executive, Bob Bakishwas ousted in April after clashing with Redstone over the Skydance deal. He was replaced by a trio of executives who occupy the “office of the CEO,” a group that has proposed making $500 million in cuts, selling certain assets and exploring a potential joint venture partner for Paramount+.

Ellison pledged to bring “best-in-class” technology and modern infrastructure to Paramount+ and the free streaming service, Pluto TVwhile enhancing Paramount’s traditional television networks. “We are committed to energizing the business and strengthening Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come,” Skydance said in a statement announcing the deal.

He Paramount-Skydance deal was finalized after months of talks that appeared to have been derailed when Redstone abruptly called off negotiations on June 11. At the time, Skydance and its partners had reached an agreement to acquire National Amusements, which owns 77% of Paramount’s voting stock.

Talks reached a stalemate over other issues, however, including National Amusements’ request that the deal be approved by a majority of shareholders other than Redstone, a condition Skydance considered impossible.

Other potential bidders for National Amusements emerged: Hollywood independent producer Steven Paul, Seagram heir Edgar Bronfman, backed by the private equity firm Bain Capital, and IAC Chairman Barry Diller. Even earlier, Sony Pictures and the buyout firm Apollo Global Management had expressed interest, though a deal never materialized. Meanwhile, talks between Ellison and Redstone have quietly resumed and become more constructive, according to two people familiar with the discussions.

New agreement

Skydance raised the Redstone family’s payment for the sale of National Amusements to $1.75 billion, according to one of the people familiar with the terms of the deal. It also enhanced legal protections against potential shareholder lawsuits, clearing the way for a new deal, the person said. Under the terms of the deal, Skydance, which Ellison owns, will merge with Paramount in an all-stock transaction that will value Skydance at $4.75 billion, creating a company worth $28 billion.

Ellison and his financial partners, the Ellison family and Redbird Capital Partners, will pay $15 per share in cash or stock to Paramount’s non-voting Class B shareholders, representing a 48% premium as of July 1. Holders of Class A voting shares would receive $23 per share in cash or stock, representing a 28% premium as of July 1. Upon closing, the Skydance investor group will own 100% of the new Paramount’s Class A voting shares and 69% of its outstanding Class B shares.

The deal also gives Paramount 45 days to find a better offer.leaving open the possibility of another plot twist in an already chaotic negotiation process.

Source: Ambito

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest Posts