Skydance Revises Paramount Offer With $3 Billion Cash Infusion to Allay Shareholder Worries

The new terms would sweeten the deal for some non-voting Class B shares, an insider tells TheWrap

Skydance Media CEO David Ellison and National Amusements President Shari Redstone
Skydance Media CEO David Ellison and National Amusements President Shari Redstone (Getty Images / Illustration by TheWrap)

David Ellison’s Skydance Media has made a revised offer for Paramount Global in an effort to assuage minority shareholders’ concerns as the two parties’ exclusive talks are set to expire on May 3.

An individual familiar with negotiations tells TheWrap that the new offer includes a $3 billion cash injection as well as premium sweetener for a percentage of non-voting Class B shares.

The two-step deal would see Skydance acquire the company through controlling shareholder Shari Redstone’s stake in National Amusements, which owns 77% of Paramount voting stock. The second step would see Skydance and Paramount merge to create a combined company valued at around $5 billion. Under the new terms, Redstone, who is already set to get a premium for her shares, could take less cash and keep more equity in Paramount under one scenario being discussed.

Representatives for Paramount and Skydance declined to comment. A spokesperson for National Amusements and Redstone did not immediately return TheWrap’s request for comment.

The new terms come as a number of investors have expressed opposition to the Skydance deal, including Matrix Asset AdvisorsAriel InvestmentsAspen Sky Trust and Blackwood Capital Management. They argued that Skydance’s previous bid prioritized the interests of controlling shareholder Redstone over the rest of Paramount’s shareholders and would dilute their own holdings.

Ariel’s founder and chairman John Rogers Jr., whose firm had a 1.8% stake in Paramount as of the end of 2023, and GAMCO Investors Inc. chairman and CEO Mario Gabelli, who owns 5 million voting shares, have also both previously warned that they could pursue litigation if the Skydance deal or any other bid does not appropriately benefit their clients.

In addition to Skydance, Apollo Global Management made a $26 billion all-cash offer, which was reportedly rebuffed due to concerns around the financing of its bid. The private equity firm has since entered talks with Sony about potentially making a new joint bid, though no offer has formally been made.

Paramount is slated to report its earnings results for the first quarter of 2024 after the bell on Monday. Analysts surveyed by Zacks Investment Research expect the company to report earnings of 34 cents per share on revenue of $7.68 billion.

Additionally, Paramount Global CEO Bob Bakish is expected to exit his role, two insiders told TheWrap on Saturday. According to The Wall Street Journal, Paramount will establish an “Office of the CEO,” composed of the company’s division heads, to replace Bakish on an interim basis. 

Bakish’s departure follows news earlier this month that four members of the board — including three who were on the independent special committee evaluating bids — would not seek reelection at Paramount’s June 4 annual meeting.

Shares of Paramount, which are up more than 3% during Monday’s trading session, have climbed 12% in the past six months but are down 47% in the past year and 14% year to date.


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