Paramount to continue talks after both offers looked ready to fall through

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Despite both offers on the table for Paramount Global being on the brink of falling apart just days ago, the company will continue to negotiate with both parties as of May 6, 2024.

Skydance Media and RedBird Capital have teamed up to try to acquire Paramount, but insiders told Variety May 3, 2024, that the deal was not likely to close.

Skydance reportedly put its “best and final” offer forward in late April 2024.

Meanwhile, an all-cash offer from Sony Pictures and Apollo Global Management is now being discussed after the Skydance-Paramount exclusivity period ended May 3.

There had been speculation that both deals were about to fall apart as of May 3, but the Paramount board has since authorized a committee to continue talks with both Skydance and Sony-Apollo, reported Deadline.

There were previous reports that it was unlikely a deal would come through by the deadline. The May 3 report of both deals falling through has added to the rocky road at the company. 

Shari Redstone, who controls Paramount through National Amusements, had been ready to walk away from Skydance, it was reported May 3. However, it now appears talks will continue. 

Redstone ultimately has to be the one to decide what offer, if any, to take. As a fiduciary officer, both she and the Paramount board are obligated to consider any credible offers, including the Sony-Apollo one.

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It appears at least one sticking point with the previous Skydance offers was who would benefit from the sale of Paramount. Some Paramount shareholders have been vocal about how the original Skydance offer was structured in a way that Redstone herself would be the primary beneficiary of a sale.

Skydance reportedly revised its offer to be more appealing to shareholders and offered a cash infusion that could be used for Paramount to pay down debt.

Sony’s offer is more appealing, at least at face value, because it is all cash and pays a premium to shareholders.

However, some sources say that the $26 billion offer is likely DOA because of regulatory and antitrust concerns. Sources also told Variety that Redstone may be unlikely to warm to the Sony offer because it involves private equity funding. 

Redstone is said to be wary of selling her family company’s stake in Paramount (her father, Sumner Redstone, founded National Amusements as a movie theater chain, was chair of CBS and founded and lead the second iteration of Viacom, one of the predecessors to Paramount.

Watchers say it’s likely Paramount could face legal action from shareholders if it declines the Sony offer and one option is to turn down both offers in favor of either continuing to operate as is or pursue other deals.

The situation could change significantly at any point and it’s not a forgone conclusion that no deal will reached.

In the midst of all this, Paramount CEO Bob Bakish was essentially forced to resign from his post and has been replaced with a team of three leaders, though the company has yet to publicly finalize how that leadership structure will work. Separate reports indicated that Redstone no longer trusted Bakish so he was removed prior to a potential sale.

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