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Shari Redstone launches auction of Paramount Global holder: source

Shari Redstone will begin a formal auction for National Amusements, the holding company that controls the struggling media giant Paramount Global, the newspaper reported.

Redstone's banker, BDT Capital Partners, the 69-year-old daughter of media mogul Sumner Redstone, has circulated non-disclosure agreements to private equity firms giving them access to National Amusement's finances. The company has begun to expand its search for potential bidders. That included Warner Bros.' Discovery, according to a source close to the situation.

Redstone is seeking a significant price increase from National Amusements, which owns 10% of Paramount Global and controls 77% of the voting stock, according to people briefed on the process. It is said to be equivalent to 50% of the market capitalization.

“I think she wants to sell everything, not just the holding company,” said a source close to Redstone, noting that talks to sell Paramount Global itself have not yet come to fruition. “But there may not be any bids.”

Paramount Global, whose movie studio is behind the “Mission: Impossible” and “Transformers” franchises and also owns CBS, Nickelodeon, Comedy Central and MTV, closed on Wednesday with a market capitalization of $9.4 billion. The company's shares in National Amusement were transferred. The face value is just under $1 billion.

Shari Redstone is selling National Amusements, which owns 77% of Paramount Global's voting stock. AFP (via Getty Images)

The value of the stock could be quite high, given the controlling power the voting stock has over Paramount. Additionally, National Amusements owns several loss-making movie theater chains, including Showcase Cinemas, Multiplex Cinemas, and Cinema de Lux.

A National Amusement representative declined to comment.

on wednesday, The Wall Street Journal reported Skydance, the Hollywood studio that co-produced “Top Gun: Maverick'' with Paramount, is negotiating an all-cash bid for National Amusements, with Skydance CEO David Ellison, whose father is a tech mogul, The company reportedly has the backing of Oracle founder Larry Ellison.

According to the paper, Ellison is seeking to acquire at least a majority stake in National Amusements with an eye toward merging his studio with Paramount.

Those talks are at a “very early stage” and could fall apart, the newspaper reported on Wednesday.

Paramount Global CEO Bob Bakish recently met with Warner Bros. Discovery CEO David Zaslav to discuss a potential merger. Getty Images for Paramount Pictures

Redstone is casting a wider net as National Amusements faces a March deadline for making a $37.5 million payment on a $175 million loan from Wells Fargo & Co., people said. It may not be possible to pay in cash.

Last May, National Amusements issued $125 million in preferred stock at 7.75% interest to banker Byron Trott's BDT partners.

Those obligations could make it more difficult for National Amusements to sell to private equity, the people said. The acquiring companies will not face the same regulatory hurdles as their media rivals, but the added difficulty of financing acquisitions will make it more difficult to turn a profit, the people said.

And while Paramount is trying to sell the BET Network to boost its stock price, the proceeds likely won't be used to pay down National Amusement's debt, given Paramount's own large debt burden, people familiar with the matter said. one person said.

Last month, Paramount Global CEO Bob Bakish met with Warner Bros. Discovery CEO David Zaslav to discuss a possible merger.

Redbird Capital Partners, which backs Skydance and is co-producer of “Top Gun: Maverick,” has held exploratory discussions with Redstone. ©Paramount/Courtesy of Everett Collection

Redstone also held exploratory discussions with Jerry Cardinale's private equity firm Redbird Capital Partners, which backs Skydance, the people said.

Elsewhere, national amusement options seem increasingly limited.

The tech giant will face intense antitrust scrutiny over its acquisition of Paramount Global.

Shares of Warner Bros. Discovery soared following reports of a meeting between Bakish and Zaslav.

A bid from Redbird could also face regulatory hurdles. The company's subsidiary, Redbird IMI, led by Jeff Zucker, reportedly raised $750 million from Abu Dhabi for a $2.3 billion fund.

However, the money Redbird invested in Skydance did not come from the Redbird IMI fund, the people said.

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