INDEPENDENT film and TV producer Skydance Media has reached a preliminary agreement to buy Shari Redstone’s National Amusements and merge with Paramount Global, the parent of CBS and MTV, according to a source with knowledge of the matter.
National Amusements, the family company that controls Paramount, will refer the deal to a special committee of Paramount directors for review, said the source, who asked not to be identified discussing an agreement that has not been announced.
The accord followed the collapse last month of talks between Skydance and National Amusements. The two reengaged with each other in the last week, with discussions picking up steam on Tuesday (Jul 2), the source said.
The new terms include a higher valuation for National Amusements and stronger language indemnifying the Redstones’ company against litigation that may result from the deal, the source said. The sellers have 45 days to seek better offers, another source familiar with the matter said.
Paramount and Skydance, led by Oracle co-founder Larry Ellison’s son David Ellison, declined to comment. National Amusements did not respond to inquiries. The Wall Street Journal reported on the agreement earlier Tuesday, saying the terms of the deal were not known.
An agreement could be announced within days, the source said, though it’s still possible the deal could fall apart.
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Nonvoting shares of Paramount rose as much as 10 per cent to US$11.83 in extended trading.
As part of the transaction that Ellison previously proposed, he and his partners, including RedBird Capital Partners and KKR, offered to buy National Amusements for US$2.25 billion and inject US$1.5 billion into Paramount’s balance sheet to pay down debt. The film and TV company’s long-term borrowings exceed US$14 billion.
The Ellison group would have contributed US$4.5 billion in additional funds to purchase Paramount shares. Up to 50 per cent of Paramount’s Class B non-voting shareholders were to receive US$15 a share and all of the non-Redstone family Class A shareholders were to get US$23 a share, sources familiar with the discussions said at the time.
The investments represented a significant potential lifeline for Paramount, which has struggled to compete as consumers abandon movie theatres and cable TV in favour of streaming.
The company had a net loss of US$554 million, or 87 US cents a share, in the first quarter.
Earlier on Tuesday, Bloomberg News reported that Paramount is in exclusive talks to sell its Black Entertainment Television network to buyers that include BET chief executive officer Scott Mills and Chinh Chu, who runs the New York-based private equity firm CC Capital.
The group has been discussing an offer of US$1.6 billion to US$1.7 billion, according to sources familiar with the matter who asked not to be named revealing information that’s not public. BLOOMBERG
