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Fate of Paramount Global and Skydance Merger Remains Uncertain After AGM

Network 10 and Paramount+ owners, Paramount Global revealed plans this week to cut costs and find a streaming service partner.

At the company’s annual shareholder meeting, Shari Redstone, Paramount’s controlling shareholder, alongside the CEOs of its key divisions including Paramount Pictures, Paramount Media Networks and CBS, unveiled a roadmap towards cutting back around A$751.42 million in costs and divesting noncore assets.

Paramount has approximately A$21.94 billion in long-term debt as of March 31.

Analysts were keenly tracking any indication of what Paramount has decided regarding its potential Skydance merger.

Paramount has agreed to the framework of the merger terms with a consortium comprised of David Ellison’s Skydance Media and private equity firms RedBird Capital and KKR.

Skydance owned by David Ellison, son of billionaire Oracle co-founder Larry Ellison, is the producer of titles including Mission: Impossible – Dead Reckoning, Transformers: Rise of the Beasts and Top Gun: Maverick.

Paramount are the owners of Hollywood studio Paramount Pictures, CBS, MTV and Comedy Central.

The deal is still awaiting approval of Redstone, who owns National Amusements, which holds 77 per cent of Class A Paramount shares.

The plans that Paramount Global shareholders heard this week is Redstone’s backup option if she chooses not to sell.

Earlier this year, news about a potential deal to merge Paramount Global and Skydance Media in an all-stock transaction valued at around A$7.5 billion emerged.

Last week, Sydance’s Ellison reduced his initial A$3.76 billion offer for National Amusements to provide additional cash for the company’s nonvoting shareholders.

In a later bid submitted last week, Ellison created more cash for shareholders by reducing Skydance’s valuation of the merger to $7.14 billion from A$7.5 billion, a move that wasn’t likely to be welcomed by Redstone.

As plans of the merger have dragged on for a few weeks now, Warren Buffett too admitted that he sold down his shareholding in Paramount.

A special committee of Paramount’s board was established to evaluate the media company’s options and spent months negotiating with Skydance decided to walk away from the deal.

Several shareholders were also critical of the deal and urged the board to conduct a more thorough review of the alternatives.

As a period of exclusivity with regards to the Skydance deal lapsed, Paramount evaluated a rival nonbinding offer letter from Sony Pictures Entertainment and Apollo Global Management.

Paramount has shed around A$27.05 billion in market value since December 2019, when Redstone reunited CBS and Viacom.

Here in Australia, the Australian Securities and Investments Commission documents reveal Ten’s revenue fell to $675 million as of December 31, 2022, from $695.8 million in 2021.



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