Paramount and Skydance Reach New Deal to Merge
Shari Redstone, the president of National Amusements, has reached a preliminary agreement with David Ellison’s Skydance to merge with Paramount, according to two people familiar with the matter. This deal comes after a previous agreement failed just weeks earlier.
Background
Paramount, a major film and television production company, has been exploring options to merge with other companies. In June, Redstone killed a previous deal with Skydance, citing concerns over the terms of the agreement. The deal would have seen Skydance acquire roughly half of Paramount’s controlling shares at $15 per share, for $4.5 billion, and contribute $1.5 billion towards Paramount’s balance sheet.
New Deal Terms
The resurrected deal will see Redstone receive a reduced consideration of $1.75 billion. The other financial terms of the deal will remain unchanged. Skydance will acquire roughly half of Paramount’s controlling shares at $15 per share, for $4.5 billion, and contribute $1.5 billion towards Paramount’s balance sheet.
Why the Deal Matters
The merger between Paramount and Skydance is significant because it will create a major player in the entertainment industry. The combined company will have a strong presence in film and television production, as well as a significant library of content. This will give the company a strong foundation for future growth and expansion.
Other Interested Bidders
In addition to Skydance, other companies had expressed interest in acquiring Paramount. These included a joint effort from private equity firm Apollo and Sony, as well as a recent entreaty from Barry Diller, chairman of media conglomerate IAC. However, it appears that Skydance has emerged as the preferred bidder.
What’s Next
The deal is still subject to approval by Paramount’s special committee and its shareholders. If approved, the merger is expected to be completed in the coming months.
Conclusion
The merger between Paramount and Skydance is a significant development in the entertainment industry. The combined company will have a strong presence in film and television production, as well as a significant library of content. This will give the company a strong foundation for future growth and expansion.
FAQs
Q: What is the significance of the merger between Paramount and Skydance?
A: The merger will create a major player in the entertainment industry, with a strong presence in film and television production, as well as a significant library of content.
Q: What are the terms of the deal?
A: The deal will see Skydance acquire roughly half of Paramount’s controlling shares at $15 per share, for $4.5 billion, and contribute $1.5 billion towards Paramount’s balance sheet.
Q: Why did Redstone kill the initial deal?
A: Redstone killed the initial deal due to concerns over the terms of the agreement, including the reduced consideration of $1.75 billion.
Q: Who else was interested in acquiring Paramount?
A: Other companies that expressed interest in acquiring Paramount included a joint effort from private equity firm Apollo and Sony, as well as a recent entreaty from Barry Diller, chairman of media conglomerate IAC.
Q: What’s next for the deal?
A: The deal is still subject to approval by Paramount’s special committee and its shareholders. If approved, the merger is expected to be completed in the coming months.
Author: www.cnbc.com
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