Paramount Global and Skydance Media’s $8 billion merger is expected to close on Aug. 7. Following the closing, the combined company’s stock will begin trading on the Nasdaq under a new ticker symbol: PSKY.
Under the two-step deal, Skydance is set to acquire controlling shareholder Shari Redstone’s holding company National Amusements, which controls 77.4% of the Paramount Class A common stock outstanding and approximately 9.5% of the overall equity of the company, before merging with the Hollywood studio.
The deal provides $2.4 billion for Redstone, $4.5 billion to non-NAI Paramount shareholders and an additional $1.5 billion in new capital to help pay down debt and recapitalize the company’s balance sheet.
Class A shareholders can elect to receive $23 cash per share or 1.5333 shares of Class B stock of New Paramount. Class B shareholders can elect to receive $15 per share or one share of Class B stock of New Paramount, which is subject to proration if those elections exceed $4.3 billion in aggregate. If shares are elected over cash — reducing the cash required to under $4.3 billion — the $1.5 billion of cash going to Paramount’s balance sheet could grow up to a cap of $3 billion.
Paramount shareholders of record will have until July 31 at 5 p.m. ET to make their election. For shares of common stock held by current or former Paramount employees via their Morgan Stanley stock plan account or via the Paramount Global 401(k) plan, the election deadline is 4 p.m. ET on July 28.
If an election isn’t made by the deadline, the holder of such shares will be entitled to receive the applicable stock consideration in respect of such shares. If the closing date is delayed, each election deadline will also be delayed.
Paramount has notified its directors and executive officers of an anticipated blackout period in the company’s class A and B stock funds in its 401(k) plan, which will begin the week of July 27 and end the week of Aug. 10.
During the blackout period, participants and beneficiaries will be unable to invest in the funds, diversify the portion of their plan account invested in the funds, or obtain a loan, withdrawal or distribution from the plan with respect to any portion of the participant’s account invested in the funds.
The update comes after the FCC granted regulatory approval to the $8 billion deal on Thursday by a vote of 2-1 along party lines after a 251-day review.
The long-awaited approval came after Skydance agreed to appoint an ombudsman at CBS to review complaints of bias and to eliminate all diversity, equity and inclusion initiatives at Paramount.
It also came three weeks after Paramount reached a $16 million legal settlement with President Donald Trump over the editing of a “60 Minutes” interview with former Vice President Kamala Harris, a move that drew criticism from federal lawmakers and some of the company’s brightest stars.
FCC Clears Paramount-Skydance Merger
Skydance’s consortium of investors, which includes RedBird Capital Partners and the Ellison family, will control 70% of shares outstanding and have 100% voting ownership in New Paramount. The combined company will have an enterprise value of $28 billion, while Skydance is being valued at $4.75 billion.
New Paramount will be led by Skydance’s David Ellison as CEO and RedBird’s Jeff Shell as president. Redstone will exit Paramount’s board of directors following the deal’s closing. Paramount co-CEO Chris McCarthy will also exit the company.
Shares of Paramount closed down 1.58% at $13.05 apiece on Friday. The stock is up 13.8% in the past year and 23% year to date. As of the end of Friday’s trading session, Paramount has a market capitalization of $9.19 billion.
