Finance

Redstone has tentatively reached an agreement to sell shares of Paramount to Skydance


(Bloomberg) — Paramount Global, the parent company of CBS and MTV, is closing in on a merger deal with independent producer David Ellison’s Skydance Media.

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Paramount controlling shareholder Shari Redstone has reached a tentative agreement to sell her stake to Skydance, according to people familiar with the matter. Separately, Paramount and Skydance have reached an agreement on the overall framework of a merger deal, according to people familiar with the matter. It will use an exclusive 30-day talking window to work out the details.

Paramount and Skydance declined to comment, while Redstone did not respond to a request for comment.

Paramount’s stock price has fallen for years, reflecting the company’s shift in TV audiences to other forms of entertainment and the high cost of developing a streaming service. As of Wednesday’s close, the company’s market capitalization was $9.17 billion.

That led Redstone to consider selling the company to Ellison, the son of billionaire Oracle co-founder Larry Ellison. The Redstone family’s National Entertainment holds nearly 80% of Paramount’s voting rights, making their approval key to any acquisition. trade.

Ellison’s company, Skydance, has partnered with Paramount on films including “Top Gun: Maverick.” But an outright merger with Paramount would be more complicated, and there’s no guarantee they’ll reach a deal.

In addition to acquiring Redstone’s stake in Paramount, the two sides must reach a deal that satisfies Paramount’s other shareholders.

Paramount executives said at an investor conference in March that their goal is to “create value for all of our shareholders.”

Terms of the potential deal have not been determined and any agreement is subject to approval by Paramount’s board of directors. The Wall Street Journal reported earlier Wednesday that Paramount and Skydance had agreed to enter exclusive talks.

Paramount has attracted other suitors, including independent media mogul Byron Allen, Apollo Global Management and Warner Bros. Discovery.

The Wall Street Journal reported earlier that Paramount’s board of directors preferred Skydance over Apollo’s recent $26 billion all-cash takeover offer when it agreed to enter exclusive negotiations with Skydance. Paramount has approximately $14.6 billion in long-term debt.

Shares of non-voting Paramount rose 15% to $13.52 at the close in New York, their biggest one-day gain since November.

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