Witnessing a spike of up to 15% on Friday, the shares of Paramount (PARA) surged following indications from the media that the private equity powerhouse Apollo Global Management is engaged in talks aimed at acquiring the media corporation through a collaborative buyout proposal with Sony Pictures Entertainment. (Disclaimer: Apollo Global Management is the owner of Yahoo Finance.)
This development emerges subsequent to Paramount’s purported rejection of Apollo’s earlier $26 billion outright cash bid, which encompassed $14 billion in debt, intended for the complete acquisition of the enterprise. Simultaneously, there was a reported refusal of a distinct $11 billion offer specifically for the studio business made by the entity.
“We perceive this as a beneficial progression for all investors, including Shari Redstone,” CFRA analyst Ken Leon articulated in response to the divulged information. Redstone and her family exert control over Paramount through their holding firm, National Amusements.
“In the event of an all-cash acquisition of PARA shares, it is probable that Apollo, being a US-based organization, would take over the network assets (CBS and local TV station licenses), whereas Sony could secure an ownership stake in the non-FCC licensed assets (films, television shows, among other things),” he elaborated.
Paramount declined to offer any comment on the report. National Amusements, Sony, and Apollo did not respond immediately to the request from Yahoo Finance.
Paramount is presently engaged in exclusive merger discussions with Skydance Media, led by David Ellison, as per information originating from a well-informed insider.
Nevertheless, there has been public expression of apprehension among shareholders regarding the terms of the agreement, with critics suggesting that it unfairly favors Redstone. Some stakeholders have even hinted at the possibility of legal action.
Amidst the uproar, a proxy submission last week unveiled that four Paramount board members will abstain from seeking reelection: Dawn Ostroff, Nicole Seligman, Frederick Terrell, and Rob Klieger.
Ostroff, Seligman, and Terrell are presently active as independent directors on the board tasked with evaluating potential offers. It remains uncertain whether their departure will bear any influence on the ongoing negotiations with Skydance.
‘Resistant to equitable market value’
There have been reports that Skydance is pushing for a two-stage arrangement centered on the acquisition of Paramount’s parent entity, National Amusements (NAI), presently under the stewardship of Redstone as the NAI president.
As per the details provided in the Wall Street Journal, Redstone and Ellison have reached a consensus on terms enabling Skydance to acquire Redstone’s controlling interest. Subsequently, Skydance would then…
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