US Markets
Monday, June 3rd, 2024 3:29 pm EDT
Key Points
- Paramount and Skydance to Merge: After negotiations, Paramount and Skydance Media (backed by investors) agreed on a merger deal valued at $8 billion.
- Key Financial Terms: The deal includes $2 billion for controlling shareholder Shari Redstone, $4.5 billion to buy out nearly half of Paramount’s class B shares, and $1.5 billion debt reduction from Skydance and an investor.
- Post-Merger Ownership: Skydance and an investor will own two-thirds of the merged company, with remaining ownership going to class B shareholders. This avoids a full shareholder vote.
Paramount Global (formerly ViacomCBS) and Skydance Media are on the verge of merging after their special committees reached an agreement on the deal’s terms. This comes after weeks of negotiations and a competing offer from Sony Pictures and Apollo Global Management.
The proposed deal, valued at $8 billion, involves several key aspects. First, Shari Redstone, the controlling shareholder of Paramount through National Amusements, would receive $2 billion. Second, Skydance would purchase nearly half of Paramount’s class B shares for $15 each, totaling $4.5 billion. These shareholders would still retain ownership in the combined company. Third, Skydance and RedBird Capital, a private equity firm backing Skydance, would contribute $1.5 billion to Paramount to help pay off debt.
Following the merger, Skydance and RedBird Capital would own two-thirds of the new company, while the remaining third would be owned by the class B shareholders. Importantly, the deal avoids a shareholder vote, a point of contention during negotiations. Paramount’s annual shareholder meeting is still scheduled for Tuesday.
This agreement represents a significant improvement for Paramount compared to the previous offer on the table. Previously, Skydance had offered only $5 billion, with less money for Redstone and a lower price per share for class B shareholders. Additionally, Sony and Apollo’s competing $26 billion offer, though higher overall, would have broken up Paramount, which Redstone reportedly opposed.
This merger comes amidst recent leadership changes at Paramount. Bob Bakish stepped down as CEO in April, replaced by a triumvirate of George Cheeks (CBS president), Chris McCarthy (president of various Paramount divisions), and Brian Robbins (head of Paramount Pictures and Nickelodeon).
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/06/03/paramount-skydance-merger-deal-update.html
