Report: Paramount, Skydance GettingCloser to Deal

Paramount Global and Skydance Media are reportedly making significant strides toward a merger. The two media companies are actively working on a deal that would not only combine their forces but also involve the buyout of controlling shareholder Shari Redstone. 

Here are the key details:

Valuation and Equity: Paramount Global’s special committee, along with David Ellison’s Skydance Media (supported by private equity firms KKR and RedBird Capital Partners), is currently focused on determining the value of Skydance’s assets as part of the merger. Additionally, discussions are underway regarding how much equity to inject into the company through recapitalization.

Agreement on Value: The sides are close to agreeing on a value for Skydance. The entertainment company is expected to be valued at approximately $5 billion and will merge with Paramount Global. To facilitate this, Ellison and the private equity firms plan to raise approximately $4.5 billion to $5 billion in new equity.

Deal Timeline: Ideally, the buyers aim to finalize the deal in May. However, the process has faced some delays due to factors such as Paramount Global’s initial slow opening of a data room to the Skydance consortium. The exclusivity window for merger talks ends on May 3, but the Skydance consortium seeks an extension of two weeks.

Leadership Changes: Skydance intends to appoint David Ellison as the CEO of Paramount Global, with former NBCUniversal CEO Jeff Shell taking on the role of president. Current Paramount CEO Bob Bakish is expected to depart the company.

Alternative Discussions: Separately, there have been preliminary discussions between Apollo and Sony about a potential deal to buy out all Paramount Global shareholders at a premium. However, the special committee views Skydance’s offer more favorably due to its potential for future upside by keeping the company public with a cleaner balance sheet.

While challenges remain, including Paramount Global’s renewal agreement with Charter Communications, the progress made signals a significant step toward the merger.