Paramount Global and Skydance have reportedly agreed to terms for a merger between the two entertainment companies that is valued at $8 billion.
Skydance, the media company founded by David Ellison, has agreed to pay $2 billion for Paramount’s parent company National Amusements (controlled by majority shareholder Shari Redstone) under a proposal made by Paramount’s special committee. According to CNBC.
As part of the deal, Skydance will buy nearly half of Paramount’s Class B stock for $15 a share, or $4.5 billion, giving shareholders equity in the newly formed company, Faber said.
Skydance, which is backed by private equity firms RedBird Capital and KKR, will also pay down Paramount’s debt by adding $1.5 billion in cash to the studio’s balance sheet, according to CNBC.
According to CNBC reporter David Farber, Redstone, who owns 77% of Paramount’s Class A shares, would have to sign the deal on the condition that it not require a shareholder vote.
Paramount’s annual shareholders meeting is on Tuesday.
Skydance and Redbird will own two-thirds of Paramount, with the remaining third controlled by Class B shareholders.
Paramount shares traded up more than 7.4% shortly after the open on Wall Street on Monday.
In total, the deal is valued at $8 billion, up from roughly $5 billion in terms previously discussed between Paramount and Skydance. Previously, Redstone was expected to receive less than $2 billion for her shares, with Class B shareholders being bought out for $11 a share, CNBC previously reported. report.
In early May, Apollo and Sony Expressed CNBC previously reported that Redstone was interested in buying Paramount for around $26 billion and then breaking up the company, but Apollo and Sony reportedly backed out as Redstone preferred a deal that would leave Paramount intact.
As negotiations continue, Paramount has seen a shakeup in executive positions in recent months, with Bob Bakish He will step down as CEO in April. He was replaced by a three-man executive team called the “Office of the CEO.”
The business is currently led by three executives: CBS president and CEO George Cheeks, Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks, and Brian Robbins, head of Paramount Pictures and Nickelodeon.
