As the drama surrounding the potential sale of Paramount continues to play out, some insights have emerged into the rationale of Paramount’s largest shareholder Shari Redstone to reject the latest offer by Skydance Media.
The Los Angeles Times’ Meg James interviewed “seven people close to the situation” to find out why Redstone turned sour on the deal after spending months lobbying for it. Three factors emerged: a diminished financial return from the Skydance proposal, increased shareholder legal exposure, and a sense that a better offer may still be available.
While Skydance’s initial offer for Paramount and its parent company National Amusements would have netted Redstone and her family $2 billion, the threat of a potential lawsuit from Paramount shareholders caused Skydance to revise its offer to direct more of its value toward Paramount shareholders.
When the revised offer received buy-in from most Paramount shareholders and its board of directors, Redstone and her family were reportedly unhappy with the revised offer resulting in a lower payout for the shares she controlled. Redstone also wanted the deal to be structured to indemnify her from any potential shareholders’ lawsuit, something that Skydance was unwilling to offer.
Meanwhile, there has been continued interest from other suitors. Music executive Edgar Bronfman Jr. and movie producer Steven Paul have floated a joint offer to buy Redstone’s National Amusements business at a higher value than the Skydance bid was offering.
In addition, Redstone is reported to have been impressed by a recent presentation from the new executive leadership at Paramount, which outlined $500 million in cost reductions and the potential to merge its Paramount+ streaming service with Universal’s Peacock. Redstone is said to have left the presentation believing that Paramount could increase its future value by operating independently for another “12-18 months.”