Apollo Global Still Kicking Paramount's Tires

 

Apollo Global Management has recently initiated discussions with Paramount Global regarding a potential acquisition or asset purchase. A special committee formed by Paramount Global is currently engaged in these preliminary talks, marking a significant development in the ongoing saga of media consolidations12.

Here are the key details:

Apollo’s Interest:

• Apollo is evaluating the possibility of a deal specifically with Paramount.

Paramount’s major assets include:

• Paramount Pictures
• Broadcaster CBS
• A range of Viacom cable networks
• Streaming services such as Paramount+ and PlutoTV.

There’s also a chance that Apollo might bid only on select assets within Paramount’s portfolio.

Competition:

Apollo faces competition, including a group led by David Ellison’s film and TV studio Skydance Media. This rival group, which includes private equity firms KKR and RedBird Capital Partners, is evaluating an all-cash bid for Paramount’s parent company, National Amusements Inc. (NAI).

Context:

Speculation about Apollo’s interest in Paramount surfaced earlier in January but cooled down after a February report suggesting the investment firm was no longer interested. Talks of a possible merger between Warner Bros. Discovery (WBD) and Paramount Global were also paused. NBCU parent Comcast explored a commercial partnership with Paramount, but a full acquisition faces regulatory constraints.

Apollo’s Background:

Apollo has experience in Hollywood, having taken a $760 million minority stake in Legendary Entertainment (known for hits like “Dune” and “Jurassic World”). The firm also considered a joint bid for Starz with Roku, although that deal did not materialize. Recently, Apollo played a role in helping Yahoo reinvent itself after acquiring the company from Verizon in 2021.

Paramount’s Situation:

• Paramount is under pressure to find a strategic partner or buyer due to its substantial debt.
• NAI restructured some of its debt in September.
• The company has been streamlining its portfolio by shedding assets, including real estate and book publisher Simon & Schuster.

Apollo’s interest in Paramount comes at a challenging time for the industry, and the outcome of these discussions could significantly impact the media landscape,