Skydance to Meet With Paramount Global Management Next Week Amid Merger Talks

David Ellison’s media company is in the process of due diligence, an individual familiar with the negotiations tells TheWrap

David Ellison attends the 28th Annual Critics Choice Awards at Fairmont Century Plaza
Skydance CEO David Ellison (Credit: Kevin Winter/Getty Images)

David Ellison’s Skydance Media will meet with Paramount Global management next week as the two parties continue exclusive talks about a proposed acquisition of Shari Redstone’s National Amusements and merger with the media conglomerate, according to CNBC.

An individual familiar with the negotiations confirmed to TheWrap that Skydance is currently in the process of conducting due diligence.

Representatives for Paramount and Skydance declined to comment.

The latest development comes as four Paramount board members –  Dawn Ostroff, Nicole Seligman, Frederick Terrell  and Rob Klieger – are expected to step down. Ostroff, Seligman and Terrell are members of Paramount’s independent committee, which must approve the Skydance deal, while Klieger is Redstone’s longtime attorney.

Skydance, which is valued at more than $4 billion, has been a coproducer with Paramount on projects such as the “Mission: Impossible” franchise and “Top Gun: Maverick.” Its deal, which CNBC reported would include raising new equity and an ownership stake of somewhere between 45% to just over 50%, would be financed with the help of a consortium of investors, including private equity firms RedBird Capital Partners and KKR, as well as Larry Ellison, Ellison’s father and Oracle’s cofounder.

The senior Ellison would reportedly put up some of the new funding and potentially provide Paramount with access to artificial intelligence software and other data technology from Oracle. David Ellison, meanwhile, would likely lead the new company, while former NBCUniversal CEO Jeff Shell would also have a major leadership role. Additionally, management would reportedly be open to divestitures of assets, such as BET Media Group. Bloomberg separately reported that Skydance would look to merge Paramount+ with a rival, such as Peacock, Max or Prime Video, and would hold onto CBS.

Redstone’s National Amusements, which currently owns 77.3% of Paramount’s Class A (voting) common stock and 5.2% of its Class B common stock, could receive over $2 billion in cash from the Skydance deal, according to the Journal. Skydance would reportedly be acquired in an all-stock deal valued at around $5 billion.

Paramount shareholder Matrix Asset Advisors has slammed the proposed deal as “suboptimal” and “detrimental” to the company’s value and argue that it prioritizes Redstone over the company’s other shareholders.

Meanwhile, another shareholder, Aspen Sky Trust, has accused the company of breaching its fiduciary responsibility by not pursuing talks with competing bidders. Aspen called on the company to end its exclusive talks with Skydance and engage in competitive bidding negotiations, and took aim at Redstone by asking the company to halt discussions with any future bidders that would “propose instant rewards for one or a few interested parties while saddling the remaining shareholders with all the risk or, even more concerning, unbridled dilution of value as presented in the current set of circumstances.” 

Redstone has indicated a preference for a deal with Skydance over a $26 billion all-cash offer from private equity firm Apollo Global Management, which was reportedly rebuffed due to concerns around how the bid would be financed. Paramount Global CEO Bob Bakish also met with Warner Bros. Discovery CEO David Zaslav in December about a potential merger, though those talks have since halted. Byron Allen placed a $30 billion bid including debt for the company, though it’s unclear how that deal would be financed.

Aspen Sky Trust also issued a cease and desist and pre-litigation letter to Redstone demanding she “immediately cease-and-desist from any involvement in the ongoing discussions, negotiations, and evaluations of Skydance Media’s bid to Paramount.” The letter threatens further “legal action” if Redstone does not “send written confirmation” that she ceases the Skydance talks before 5:00 p.m. Eastern on Friday, April 12.

Redstone has notably recused herself from the special committee. Paramount shares, which popped 2% during Thursday’s trading session, are down 25% year to date and 11.7% in the past six months.

Emily Smith contributed to this report

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