Paramount Global is closing its deal with Skydance Media as it awaits a response from Sony Pictures Entertainment and private equity firm Apollo Global Management to its proposal to buy the entertainment giant for $26 billion, according to people familiar with the matter. It is unlikely that a contract will be reached after 30 days of exclusive negotiations. problem.
A special committee of Paramount’s board of directors was established to evaluate offers for the company and has been negotiating an exclusive contract with Skydance since April 3. That exclusivity period ends Friday, but people familiar with the matter said it was unlikely to be extended. It will be extended and open to other bidders.
The companies submitted a non-binding offer letter on Wednesday signed by Sony Pictures CEO Tony Vinciquerra and Apollo partner Aaron Sobel, people confirmed to Reuters. . The $26 billion offer is a combination of cash and debt assumption.
Apollo declined to comment to Reuters, but Reuters reported in April that Sony’s Sony Pictures Entertainment and Apollo were in talks about a joint bid. Paramount and Sony also declined to comment on the proposed acquisition of Apollo and Sony, which was first reported by the Wall Street Journal.
Spokespeople for Skydance and the Paramount task force also declined to comment.
SPE will hold a majority stake in the business, which will include TV characters such as SpongeBob SquarePants, as well as Star Trek, Mission: Impossible, Indiana Jones and others, people familiar with the matter previously told Reuters. will operate Paramount, which spans a movie library.
Shari Redstone’s media empire on Monday replaced CEO Bob Bakish with three executives, while four independent members of Paramount’s board of directors are scheduled to resign at the company’s June 4 annual shareholder meeting. be.
Some shareholders expressed concerns about the deal with David Ellison’s Skydance and urged Paramount to consider other offers, including one from Apollo.
Bloomberg News reported that Redstone and Ellison, who own a majority of Paramount’s voting shares, made concessions to make the deal more attractive to shareholders.
Paramount’s struggles
Paramount is struggling to recover from last year’s months-long strike by Hollywood writers and actors, a slump in the U.S. advertising market and cord-cutting that eroded profits from its television business.
The company’s streaming service lags far behind rivals like Netflix and Disney+ in subscriber numbers, but Redstone said the 2019 merger of CBS and Viacom created the combined company, later renamed Paramount Global. This was despite expectations that it would lead to improved competitiveness.
Paramount’s stock price has since fallen more than 65%, wiping out more than $14 billion in market capitalization.
Wednesday’s closing price of $12.26 valued the company at $7.67 billion, according to LSEG data. It has more than $14 billion in debt.
A potential acquisition would help SPE increase its share of the North American box office. Sony Pictures earned $1.01 billion at the U.S. and Canadian box office last year, compared to $842.4 million for Paramount, according to ComScore data.
A division of the Tokyo-based Sony Group, SPE’s activities include film and television production, acquisition and distribution, digital content creation and distribution, operation of studio facilities, and development of new entertainment products, services and technologies. It is said that it extends to.
The group owns more than 3,500 movie titles and well-known franchises such as “Jumanji,” “Resident Evil” and James Bond.
