Paramount agrees to merge with Skydance, ending monthslong negotiations and Redstone era

by | Jul 8, 2024 | Business

In this articlePARAFollow your favorite stocksCREATE FREE ACCOUNTThe Paramount Studios in Los Angeles, California, US on Monday, April 29, 2024. Eric Thayer | Bloomberg | Getty ImagesParamount Global has agreed to merge with Skydance, capping off a monthslong negotiation, in a deal that would see the Redstone family step away from control of the storied movie studio and media company.Paramount’s special committee signed off on the merger on Sunday, days after Shari Redstone’s National Amusements, the controlling shareholder of Paramount, once again reached a preliminary agreement with Skydance, the production company known for “Top Gun: Maverick.” A similar deal had weeks earlier been stopped in its tracks.The latest iteration of the deal will see the buying consortium, which includes private equity firms RedBird Capital Partners and KKR, invest more than $8 billion into Paramount and to acquire National Amusements. The deal gives National Amusements an enterprise value of $2.4 billion, which includes $1.75 billion in equity.Paramount’s class A shareholders will receive $23 apiece in cash or stock, while class B stockholders will receive $15 per share, equating to a cash consideration totaling $4.5 billion available to public shareholders. As part of the deal Skydance will also inject $1.5 billion of capital into Paramount’s balance sheet.”It’s a new Paramount, it’s not just a catchphrase,” said RedBird’s Jeff Shell, the former NBCUniversal CEO, on a call with investors Monday. “We think it’s going to be a new day for these combined assets.”Skydance founder David Ellison will lead the combined company as CEO, while Shell will serve as president.The merger is subject to regulatory approval, and expected to close in the third quarter of 2025. It also includes a 45-day “go-shop period,” in which the Paramount special committee can solicit other offers.A completed Skydance merger would mark a major shift for the ownership of Paramount, as well as for Hollywood as a whole.The Redstone family has long controlled the movie studio — known for films such as “The Godfather,” “Top Gun” and “Forrest Gump” — as well as the CBS broadcast network and cable TV networks including MTV and Nickelodeon.Now, Ellison, 41, who is also the son of Oracle founder and billionaire Larry Ellison, will be at the helm of a major movie studio and among Hollywood’s elite.”It’s been a long time since a creative executive ran one of the big Hollywood companies,” Shell said on Monday’s call. “And I think it’s really important when creative is the core.”Paramount’s business — and stock — has been on a roller coaster, particularly in the last year, as the legacy media giant faced a weak advertising market and the continued loss of cable TV customers. Its flagship streaming platform, Paramount+, is also yet to reach profitability.Paramount stock was trading down about 3% following the investor call on Monday.Come togetherTom Cruise attends the London premiere of “Top Gun: Maverick.”Karwai Tang | Wire …

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[mwai_chat context=”Let’s have a discussion about this article:nnIn this articlePARAFollow your favorite stocksCREATE FREE ACCOUNTThe Paramount Studios in Los Angeles, California, US on Monday, April 29, 2024. Eric Thayer | Bloomberg | Getty ImagesParamount Global has agreed to merge with Skydance, capping off a monthslong negotiation, in a deal that would see the Redstone family step away from control of the storied movie studio and media company.Paramount’s special committee signed off on the merger on Sunday, days after Shari Redstone’s National Amusements, the controlling shareholder of Paramount, once again reached a preliminary agreement with Skydance, the production company known for “Top Gun: Maverick.” A similar deal had weeks earlier been stopped in its tracks.The latest iteration of the deal will see the buying consortium, which includes private equity firms RedBird Capital Partners and KKR, invest more than $8 billion into Paramount and to acquire National Amusements. The deal gives National Amusements an enterprise value of $2.4 billion, which includes $1.75 billion in equity.Paramount’s class A shareholders will receive $23 apiece in cash or stock, while class B stockholders will receive $15 per share, equating to a cash consideration totaling $4.5 billion available to public shareholders. As part of the deal Skydance will also inject $1.5 billion of capital into Paramount’s balance sheet.”It’s a new Paramount, it’s not just a catchphrase,” said RedBird’s Jeff Shell, the former NBCUniversal CEO, on a call with investors Monday. “We think it’s going to be a new day for these combined assets.”Skydance founder David Ellison will lead the combined company as CEO, while Shell will serve as president.The merger is subject to regulatory approval, and expected to close in the third quarter of 2025. It also includes a 45-day “go-shop period,” in which the Paramount special committee can solicit other offers.A completed Skydance merger would mark a major shift for the ownership of Paramount, as well as for Hollywood as a whole.The Redstone family has long controlled the movie studio — known for films such as “The Godfather,” “Top Gun” and “Forrest Gump” — as well as the CBS broadcast network and cable TV networks including MTV and Nickelodeon.Now, Ellison, 41, who is also the son of Oracle founder and billionaire Larry Ellison, will be at the helm of a major movie studio and among Hollywood’s elite.”It’s been a long time since a creative executive ran one of the big Hollywood companies,” Shell said on Monday’s call. “And I think it’s really important when creative is the core.”Paramount’s business — and stock — has been on a roller coaster, particularly in the last year, as the legacy media giant faced a weak advertising market and the continued loss of cable TV customers. Its flagship streaming platform, Paramount+, is also yet to reach profitability.Paramount stock was trading down about 3% following the investor call on Monday.Come togetherTom Cruise attends the London premiere of “Top Gun: Maverick.”Karwai Tang | Wire …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
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