Paramount Global and Skydance Media have agreed to terms on a merger that is likely to be announced in the coming days, according to a new report by David Faber of CNBC. Skydance had reportedly introduced a revised offer of late to purchase National Amusements and merge with Paramount Global that gives nonvoting stakeholders the opportunity to cash out their shares at a premium.
If closed, the deal would reportedly have National Amusements president Shari Redstone receive $2 billion for the company. Skydance would also reportedly buy out nearly 50% of class B Paramount shares for $15 each for a total of $4.5 billion, thus giving shareholders an equity stake in the company. Skydance, along with private equity firm RedBird Capital, will also provide $1.5 billion as a cash infusion to the Paramount balance sheet to assist in reducing overall debt.
“We received the financial terms of the proposed Paramount/Skydance transaction over the weekend and we are reviewing them,” a National Amusements spokesperson said. The deal is reportedly pending a sign off from Redstone, who serves as the chair of the board of Paramount Global.
This agreement comes following several weeks of discussion and a rival offer from Apollo Global Management. Moreover, Paramount’s shareholders will not need to vote on the deal since the entity was part of negotiations. The shareholder meeting will take place on Tuesday of this week. The total value of the deal is $8 billion, which represents an increase of $3 billion from the reported previous offer in which Redstone would have received less than $2 billion for her stake of 77% of class A Paramount shares. Under those terms, shareholders would have been bought out a premium of almost 30% at $11 per share.
The report indicates that Skydance Media and RedBird Capital would own two-thirds of Paramount while class B shareholders would own the additional one-third of the company. Paramount Global is the parent company for CBS Sports, which recently promoted David Berson to the role of president and chief executive officer following the retirement of chairman Sean McManus.
Last month, Paramount chief executive officer Bob Bakish stepped down from his role and was replaced by an “Office of the CEO” consisting of three executives – George Cheeks, president and chief executive officer of CBS; Chris McCarthy, president and chief executive officer of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, president and chief executive officer of Paramount Pictures and Nickelodeon.
Paramount Global, with its CBS Sports and Nickelodeon divisions, broadcast Super Bowl LVIII and attained a record-setting audience that averaged 123.7 million across platforms, according to data by Nielsen Media Research. CBS Sports is preparing to enter the second season of its deal with the Big Ten Conference that includes an exclusive window on Saturday afternoon. Moreover, the company continues to broadcast various golf tournaments and the NCAA Division I Men’s Basketball Tournament.
