The shape of a possible sale of Paramount is becoming more defined, with the Wall Street Journal breaking news on Wednesday that Paramount Global and Skydance Media have begun 30 days of exclusive talks to finalize terms on a deal that would merge the two companies. Over the past four months, Warner Bros. Discovery, Allen Media Group, and private equity firm Apollo Global Management have also shown interest in acquiring Paramount’s studio and other businesses.
Shortly before Paramount and Skydance announced their exclusive negotiation, Apollo increased its offer from $11 billion to $26 billion in a last-ditch effort to remain in consideration. Shari Redstone, President of National Amusements which controls nearly 80% of the shares in Paramount Global, has indicated a preference for the Skydance offer, led by David Ellison the son of tech entrepreneur Larry Ellison, the founder of Oracle.
Any deal between the two companies will be complicated by the various stakeholders with an interest in the outcome. On Paramount’s side, a deal would need to be approved by an independent committee of directors who must ensure that it benefits not only Redstone and National Amusements but also Paramount’s other shareholders. Some directors are said to be skeptical of Skydance’s post-merger plans for the company.
On Skydance’s side, financing the deal would require significant contributions from outside investors including the tech entrepreneur Larry Ellison, who is the father of Skydance CEO David Ellison. Private equity goliaths RedBird Capital and KKR would also be involved, pooling their resources to buy up a controlling share of Paramount’s stock, while leaving the company publicly traded with other shareholders. While these complications are significant, the parties are said to be motivated and optimistic that a deal will be struck.