In what appears to be a significant move within the media and entertainment landscape, Paramount Global and Skydance Media are reportedly on the cusp of finalizing an $8 billion merger deal, marking a pivotal moment after extensive negotiations spanning several months.
Reports from CNBC indicate that a committee comprising Paramount’s independent directors, alongside Skydance’s consortium, which includes RedBird Capital Partners and KKR, have reached a consensus. However, the final seal of approval rests with Shari Redstone, the influential head of National Amusements, which holds a commanding 77% stake in Paramount’s voting shares. An official announcement of this substantial merger, with an estimated valuation of $8 billion, is anticipated to be made within the next 24 to 48 hours, according to CNBC sources.
While Paramount has refrained from commenting on the matter, the news has already stirred activity in the stock market, with Paramount Global’s shares experiencing a notable 7% surge in Monday morning trading, indicating investor optimism about the potential merger’s outcomes and synergies.
Initial reports from The Wall Street Journal shed light on the structure of the proposed deal. Skydance Media, led by David Ellison, scion of Oracle co-founder Larry Ellison, is poised to acquire National Amusements for an approximate sum of $2 billion. Concurrently, Skydance aims to procure nearly 50% of Paramount’s non-voting shares at a rate of $15 per share, totaling $4.5 billion. This offer represents a significant premium of approximately 26% over Paramount’s closing stock price on the preceding Friday.
In exchange for their shares, these stakeholders are anticipated to receive equity in the combined entity, aligning their interests with the future prospects of the newly merged company. Additionally, Skydance and its partners are expected to infuse $1.5 billion in cash into Paramount’s balance sheet, a move aimed at fortifying the company’s financial position and alleviating debt burdens.
Upon successful completion of the merger, Skydance is projected to wield control over roughly two-thirds of the amalgamated company, leaving non-voting shareholders with the remaining one-third stake.
The leadership dynamics within Paramount are poised for transformation with the advent of this merger. Currently overseen by an “office of the CEO,” comprising George Cheeks (CBS CEO), Chris McCarthy (CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks), and Brian Robbins (CEO of Paramount Pictures and Nickelodeon), the company is slated to present its long-term strategic vision at the upcoming annual shareholder meeting.
The impending merger between Paramount Global and Skydance Media is indicative of broader industry trends characterized by consolidation and strategic alliances as companies seek to navigate an increasingly competitive and rapidly evolving media landscape.
For the latest developments and updates on this merger, interested parties are encouraged to stay abreast of Paramount’s official communication channels on Facebook, Twitter, and Instagram.