Sony Pictures and private equity firm Apollo Global Management have sent a letter to the\u00a0Paramount Global\u00a0board expressing interest in acquiring the company for about $26 billion, according to people familiar with the matter.<\/p>\n
The expression of formal interest comes as David Ellison\u2019s Skydance Media, backed by private equity firms RedBird Capital and KKR, awaits word from Paramount\u2019s special committee on whether the panel will\u00a0recommend its bid to acquire the company\u00a0<\/strong>to controlling shareholder Shari Redstone.<\/p>\n Skydance Media hasn\u2019t heard anything from the special committee yet, though it expects to find out the special committee\u2019s recommendations on next moves as early as Thursday, according to people familiar with the matter. Paramount\u2019s panel could recommend approving Skydance\u2019s offer or rejecting it, or it could come back to the Skydance consortium with alternatives or changes.<\/p>\n Spokespeople for Paramount, Redstone\u2019s National Amusements, the special committee and Skydance declined to comment. Sony and Apollo did not immediately respond to requests for comment.<\/p>\n If the special committee wants to continue negotiating with Skydance, or Redstone wants more time to consider her options while still talking to Ellison\u2019s company, the sides could extend an exclusivity window that ends Friday. It\u2019s also possible Skydance could walk away from the deal, which it has been negotiating on for months.<\/p>\n If Skydance walks away, Redstone could turn her attention to negotiating a deal with Sony and Apollo, which would give all common shareholders a premium payout on their shares.<\/p>\n Paramount Global shares jumped more than 12% on the news that Sony and Apollo submitted a letter formalizing its interest, earlier reported by\u00a0The New York Times\u00a0and\u00a0The Wall Street Journal.<\/p>\n Redstone initially rejected an offer by Apollo in favor of exclusive talks with Skydance. Redstone still prefers a deal that would keep Paramount together, as Skydance\u2019s offer would, a person familiar with the matter said. A private equity firm would likely tear the company apart through a series of divestitures to extract value.<\/p>\n The Sony-Apollo offer would make the former the majority shareholder and the latter a minority holder, according to a person familiar with the letter. That could also assuage Redstone\u2019s fears that a new buyer could break apart the company, because Sony is another large Hollywood player and the owner of Sony Pictures.<\/p>\n A $26 billion offer for Paramount Global values the company higher than the company\u2019s current $22 billion enterprise value.<\/p>\n Still, the special committee would likely want to review details on financing and get assurances that there are no regulatory challenges in merging with Sony, a non-U.S. entity. To do this, the special committee would have to inform the Skydance consortium that it wants to end its exclusive talks, which would likely drive Skydance away as a bidder, according to people familiar with the matter.<\/p>\n That move would be applauded by a number of Class B shareholders, including Gamco, Matrix Asset Advisors and Aspen\u00a0Sky Trust, who have all publicly expressed dismay about the Skydance transaction. Skydance\u2019s \u201cbest and final\u201d offer included merging its entertainment assets with Paramount, raising $3 billion to buy out common shareholders at about a 30% premium on an unaffected $11 per share price, and paying Redstone nearly $2 billion for her controlling stake.<\/p>\n Redstone could also argue she\u2019s more comfortable with pushing forward at Paramount Global without a sale. Earlier this week,\u00a0the board removed Bob Bakish\u00a0as the company\u2019s CEO. Installing a new CEO and giving investors a new plan forward would be essential to assuage a restless common shareholder base, who would likely argue the Apollo-Sony bid, if real, is in the best interest of shareholders.<\/p>\n<\/p>\n Sony Pictures and private equity firm Apollo Global Management have sent a letter to the\u00a0Paramount Global\u00a0board expressing interest in acquiring the company for about $26 billion, according to people familiar with the matter. The expression of formal interest comes as David Ellison\u2019s Skydance Media, backed by private equity firms RedBird Capital and KKR, awaits word […]<\/p>\n","protected":false},"author":0,"featured_media":4046,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-4045","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/4045","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=4045"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/4045\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/4046"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=4045"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=4045"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=4045"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}