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Paramount and Skydance Media Resume Merger Talks
In a surprising turn of events, Paramount has resumed merger talks with independent production studio Skydance Media, just weeks after an earlier deal fell apart at the last minute. According to sources briefed on the matter, Skydance has made a higher offer to get the deal done.
Background
Paramount, a legendary movie studio behind iconic films like The Godfather, Titanic, and Forrest Gump, has been exploring merger options to strengthen its position in the competitive entertainment industry. Skydance Media, led by David Ellison, the son of Oracle’s billionaire founder Larry Ellison, has been a key player in these talks.
The First Deal
In the first round of talks, Skydance offered to acquire National Amusements (NAI), the company controlled by Shari Redstone, which owns about 10% of Paramount but holds the majority of its voting rights. The deal would have seen Skydance merge Paramount into its own company through a stock deal. However, Redstone abruptly ended negotiations, citing "mutually unacceptable terms."
The New Offer
Skydance has since sweetened the deal, making a higher offer to win Redstone’s approval. The new offer includes a higher valuation for NAI and a more attractive deal for Paramount shareholders. The special committee of Paramount’s board of directors, which had initially approved the earlier deal, is now evaluating the new offer.
Paramount’s Shareholders
Paramount shareholders have a 45-day "go shop" right to seek a higher offer from other potential suitors. This means that even if a deal is reached with Skydance, there is no guarantee that it will be the final agreement. Barry Diller, a New York media mogul, has also been exploring the possibility of buying a controlling stake in Paramount.
The Deal Structure
The new offer from Skydance includes a $2 billion acquisition of NAI, followed by a merger of Paramount into Skydance through a stock deal. As part of the deal, Skydance would also buy out about half of Paramount’s common shareholders at $15 a share, while paying about $1.5 billion to help reduce the company’s debt.
Conclusion
The renewed merger talks between Paramount and Skydance Media highlight the ongoing efforts of the two companies to strengthen their positions in the entertainment industry. While there is no certainty that a deal will be reached, the new offer from Skydance suggests that both parties are committed to finding a mutually beneficial agreement.
FAQs
Q: What is the current status of the merger talks between Paramount and Skydance Media?
A: The two companies have resumed merger talks, with Skydance making a higher offer to win Redstone’s approval.
Q: What is the new offer from Skydance?
A: The new offer includes a higher valuation for NAI and a more attractive deal for Paramount shareholders.
Q: What is the role of National Amusements (NAI) in the merger talks?
A: NAI, controlled by Shari Redstone, owns about 10% of Paramount but holds the majority of its voting rights.
Q: What is the "go shop" period for Paramount shareholders?
A: Paramount shareholders have a 45-day "go shop" right to seek a higher offer from other potential suitors.
Q: Who else is interested in buying a controlling stake in Paramount?
A: Barry Diller, a New York media mogul, has also been exploring the possibility of buying a controlling stake in Paramount.
Author: www.ft.com
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