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Paramount-Skydance Finally Reach Preliminary Merger Agreement

As Australia’s Network 10 and Paramount+ owner, Paramount Global, reportedly ended merger talks with Skydance Media last month, word of it sinking into deeper financial trouble began to spread.

However, those talks seem to have been revived with Skydance now believed to have reached a preliminary agreement to buy Shari Redstone’s National Amusements for A$2.61 billion and merge with Paramount, reported Bloomberg.

The agreement has been referred by National Amusements to Paramount’s directors, and if approved, it could be confirmed and made public this week itself.

Under the new terms reached during the revived talks, National Amusements received a higher valuation and there was also stronger language indemnifying it against litigation that may result from the deal.

On their part, National Amusements is no longer insisting the merger be approved by a majority of non-Redstone shareholders. The sellers will also have 45 days to seek better offers.

Paramount Pictures (Image: Sourced from Unsplash)

Previously, Skydance and its partners offered to buy National Amusements for around A$2.98 billion in cash and invest A$2.23 billion into Paramount’s balance sheet to pay down debt.

Paramount’s long-term borrowings exceed A$20.85 billion. The Skydance-led group would have contributed A$6.7 billion in additional funds to purchase Paramount shares.

The deal is important for Paramount which reported a net loss of A$825.13 million in the first quarter. When news of the talks collapsing in June surfaced, research firm CreditSights said that Paramount Global’s rating could get cut by Moody’s Ratings to junk by the end of the year. Moody’s would be the second bond grader to cut Paramount to junk, after an S&P Global Ratings downgrade in March.

On the back of media reports that a deal could still go through, Paramount’s share price soared approximately 15 per cent this week and was trading at around the A$17.07 mark at the end of trade on Wednesday.



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