Shari Redstone’s last-minute decision this week to back out of a planned merger between Paramount and Skydance Media means Wall Street bankers and top law firms are losing out on hundreds of millions of dollars in fees, according to sources close to the negotiations.
Redstone, the 70-year-old media heiresses, on Tuesday called off a deal to sell Paramount Global parent National Amusements to Skydance, even though a special committee of the media giant’s board of directors was scheduled to meet to vote on the Paramount merger proposal.
Merger proposers typically pay a significantly reduced fee if they can’t complete a deal. The Paramount-Skydance deal involved an unusually large number of bankers and lawyers in what was thought to be a landmark agreement.
“We struggled for months to get this deal,” a banker who worked on the deal told The Post. “I feel really bad for Paramount’s employees and shareholders. They got a really great deal and Paramount could have a second chance to grow.”
Since news of the aborted merger broke, Paramount’s stock price has fallen more than 8%, wiping more than $1 billion from its market capitalization.
Meanwhile, Latham & Watkins, the law firm whose international chairman Justin Hamill heads the merger advisory practice, had as many as 100 lawyers advising Skydance on a complex merger that includes Skydance’s acquisition of Redstone’s holding company National Amusements and its merger with Paramount, the people said.
Skydance also worked with three investment banks throughout the negotiations, according to sources, including Bank of America, Moelis & Company and The Rain Group.
Apollo Global Management and Sony Corp. made competing bids that also failed. They were working with Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal advisers and Citigroup Inc. and PJT Partners LLP as financial advisers, according to people familiar with the matter.
Bob Bakish, who led Paramount through much of the sale process, had also been working on possible transactions for the company other than a sale with the help of Liontree, an investment bank led by prolific deal-maker Arie Berkoff.
Redstone felt that Bakish was undermining him, and forced him to step down as CEO on April 29, according to people familiar with the matter.
Law firms and banks advising Redstone’s National Amusements holding company and the Paramount special committee will not receive fees because their compensation is not contingent on the deal being concluded.
Law firm Ropes & Gray worked with National Amusements along with financial adviser BDT & MSD Partners. Cravath, Swaine & Moore advised the Paramount special committee that was prepared to approve the merger. Centerview Partners and Rothschild & Co. worked with Paramount.
Representatives for LionTree, Moelis & Rain and Citi declined to comment. Representatives for other law firms and consulting firms mentioned in this article did not immediately respond to requests for comment.
