The likelihood of a deal between Paramount Global and Skydance Media seems to have diminished as some Paramount investors are openly revolting against its proposed terms. Reports have emerged that the initial 30-day period set aside to negotiate the deal has been extended past their original timeline. Meanwhile, private equity firm Apollo Management has continued to improve its $26 billion offer to acquire Paramount Global, having added Sony into the mix as a joint partner for their bid.
By bringing Sony in on the deal, Apollo’s offer is enhanced in several key areas. First, there was some skepticism that Apollo could come up with the $26 billion it proposed and Sony’s support will most likely include access to capital. Another key benefit is Sony’s expertise in running a large Hollywood studio. Sony’s chief executive Tony Vinciquerra has positioned Sony with Apollo as the lead organization to operate Paramount’s studio business after a merger.
Apollo and Sony are proposing to acquire Paramount Global only, unlike the Skydance offer which would step in to take over Paramount Global’s parent company National Amusements.
With talks dragging on between Paramount and Skydance, now may be the best time for other players to step forward with their best alternative offer. However, Apollo and Sony would face their headwinds, namely an antitrust concern since it would represent further consolidation in an industry that is already seen as highly concentrated. It is also quite unclear how Apollo and Sony would manage Paramount’s sizeable cable assets post-merger, as Sony does not currently have any assets in linear cable, and may want to take those into its portfolio.