Apollo, a private equity group, and Sony are planning to submit an offer to buy Paramount Global for $26 billion (£19.66 billion) in cash. The majority stake and the right to control Paramount would belong to Sony, the Japanese entity behind Sony Pictures studio, and Apollo would hold a minority stake in the entertainment behemoth, as informed by insiders. The two companies optimistically forecast that they won’t have to deal with Paramount’s existing debt of approximately $16 billion. The proposed offer ranges between $17 and $19.50 per share.
This isn’t the first time Apollo has shown interest in Paramount for the same price. To fund the offer, both Apollo and Sony are injecting a substantial amount of money. Legendary Entertainment, an Apollo affiliate that recently launched the box office hit, Dune: Part Two, plans to join this takeover bid.
Neither Paramount, Sony, nor Apollo revealed their opinions on the matter. Independent entertainment group Skydance, headed by David Ellison, son of Oracle founder Larry Ellison, is allegedly favoured by Shari Redstone, the majority voter at Paramount. Skydance, known for its blockbuster Top Gun: Maverick, is presently conversing exclusively with Paramount. This negotiation is due to end on Friday, yet Paramount may choose to extend it.
Following his departure as Paramount CEO on Monday, Bob Bakish is reportedly questioning the potential of the Skydance deal and has begun to explore alternate prospects. Claiming that Apollo’s proposal is more uncomplicated and provides a greater premium compared to Skydance’s proposal, some Paramount shareholders are endorsing it.
Skydance, in partnership with private equity firms RedBird and KKR, plans to purchase National Amusements, which owns close to 80% of Paramount’s Class A voting shares, for $2 billion. Paramount is then projected to buy Skydance for $5 billion in a stock deal, according to this plan.
A specific group within Paramount’s board is currently assessing the Skydance proposal. Skydance, earlier this week, put forth what they referred to as their “ultimate and conclusive” offer, inclusive of a control premium for Paramount’s ordinary shareholders. Owners of Paramount’s non-voting shares have expressed dissatisfaction, stating the Skydance proposal favours Redstone, rendering them neglected. – Copyright The Financial Times Limited 2024