Shari Redstone reaches tentative deal to sell her Paramount stake to Skydance: report
Media heiress Shari Redstone reached a tentative agreement to sell her controlling stake in Paramount Global to Skydance Media, according to multiple reports Wednesday.
Skydance is holding exclusive merger talks with a panel of independent directors at the company — home to storied Hollywood studio Paramount Pictures, CBS, cable networks like MTV and the Paramount+ streaming service — as part of a provisional accord to buy the Redstone family’s holding company National Amusement, according to Bloomberg.
The board chose merging with Skydance – owned by tech heir David Ellison, son of billionaire Oracle co-founder Larry Ellison – over a recent $26 billion all-cash offer from private-equity firm Apollo Global Management, The Wall Street Journal reported.
Terms were not disclosed for the tentative deal with Skydance — which has produced blockbusters like “Mission: Impossible — Dead Reckoning,” “Transformers: Rise of the Beasts” and “Top Gun: Maverick” for Paramount.
Paramount could be worth $38.8 billion and its equity could be worth about $38 per share if the firm’s networks, production assets and streaming service were sold individually, Citi had estimated on Dec. 11 after news reports on sale interests.
Shares of Paramount soared nearly 15%, to close at $13.52.
Paramount, Skydance and a spokesperson for Shari Redstone did not immediately respond to requests for comment.
Redstone, the daughter of the late media mogul Sumner Redstone, has been reluctant to part with one of Hollywood’s most prestigious studios.
She had held off on a sale in the hopes that Paramount’s balance sheet would improve and that its streaming service would take off, but the competitive landscape — which includes giants like Netflix and Disney+, has proved challenging.
Paramount, which was formed by the merger of Viacom and CBS in 2019, has seen its stock lose nearly half of its value in the past year. It has a market capitalization of about $8 billion.
Paramount Global had discussed entering exclusive talks with Skydance boss David Ellison, the son of Oracle billionaire Larry Ellison, The New York Times reported Tuesday.
Late last month, David Ellison reportedly met with Paramount’s independent board to discuss his vision for a deal, according to the outlet.
Merging the studios would require a second deal between Paramount and Skydance that has to be approved by an independent committee of directors at Paramount.
Skydance is backed by investors including Ellison’s father; private-equity firms RedBird Capital Partners and KKR, as well as Chinese tech investment giant Tencent, the Journal reported.
In 2022, the media company raised $400 million in new capital, valuing it at more than $4 billion.
Paramount was dealt a blow last week when ratings agency S&P downgraded its debt to junk last week, citing “accelerating declines” in its traditional TV business and continued uncertainty in its push toward streaming.
One silver lining that has emerged due to the downgrade is that Paramount might be easier to acquire as a buyer could work around a provision that would require them to immediately pay the company’s debt, analysts said.
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