Paramount Global shares rose 6.5% on Wednesday after reports that Shari Redstone’s National Amusements had reached a tentative agreement to sell a controlling stake in the storied media company to David Ellison’s Skydance Media.
Under the tentative agreement, Skydance will buy National Amusements, which owns 77 percent of Paramount’s voting stock, for $1.75 billion, three people familiar with the matter told Reuters on Tuesday.
The deal includes a 45-day “go-shop” period during which other bidders can submit bids, according to The Wall Street Journal, which first reported the news.
CNBC reported Wednesday that Skydance will acquire 50% of the media company’s Class B non-voting stock for $15 a share.
Paramount shares traded at $11.42.
Other companies that have expressed interest in buying National Amusements include film producer Steven Paul, Seagram heir Edgar Bronfman Jr. and IAC’s Barry Diller.
A source with ties to potential buyers told Reuters that other contenders were unlikely to abandon the bid, in part because they might make bids that were more favorable to Paramount shareholders or to Redstone personally.
National Amusements has asked a special committee of Paramount’s board of directors to review the Skydance deal, according to two people familiar with the matter.
National Amusements is not requiring that the merger with Paramount be approved by a majority of shareholders other than Redstone’s, which has been a sticking point in the past, according to The Wall Street Journal.
The sale is envisioned as the first of a two-stage deal that would see Skydance, a small independent studio, merge with Paramount, home to the namesake film studio, CBS and cable networks such as MTV and Nickelodeon.
The century-old Paramount Pictures is known for films such as “Titanic,” “The Godfather” and the “Transformers” series. Skydance co-produces Paramount films such as “Top Gun: Maverick” and “Star Trek Into Darkness.”
Paramount declined to comment on the potential deal with Skydance, and a special committee spokesman could not immediately be reached for comment.
Mr. Ellison, the son of Oracle co-founder Larry Ellison, had been trying for months to get the Paramount deal done. Sources say Ms. Redstone, the daughter of the late media mogul Sumner Redstone, enthusiastically supported the deal. But after Skydance tweaked its deal to give more money to other shareholders, Ms. Redstone scuttled the deal.
National Amusements has been in renewed talks with Skydance over the past week while continuing to talk with other interested parties, according to a person familiar with the negotiations.
Mr. Redstone always saw strategic value in combining Paramount and Skydance, the people said.
National Amusements owns cinemas in the United States, the United Kingdom and Latin America and holds 77% of the Class A voting stock of Paramount, which is owned by the Redstone family.
