Paramount Special Committee Recommends Revised Offer From David Ellison’s Skydance Media

Paramount Global’s independent special committee recommended a sweetened offer from David Ellison’s Skydance Media, paving a way for the potential merger of the his production company with the struggling media conglomerate, according to the Wall Street Journal and other media reports.

The decision, which follows months of negotiations, now puts the fate of the media conglomerate in the hands of controlling shareholder Shari Redstone.

Representatives for Paramount and Skydance declined to comment.

Under Skydance’s initial two-step plan, the company offered around $2 billion to acquire Redstone’s National Amusements, which owns 77% of Paramount’s class A voting stock and 5.2% of its class B common stock. The second step would then see Skydance merge with Paramount to create a combined company valued at around $5 billion.

An individual familiar with the plan previously told TheWrap that former NBCUniversal CEO Jeff Shell and Skydance’s chief creative officer Dana Goldberg and president Jesse Sisgold are expected to have major roles in the combined company. Skydance’s bid is backed by a consortium of investors, including RedBird Capital Partners, KKR, and Oracle co-founder Larry Ellison.

That deal has faced pushback from Paramount’s minority shareholders, who argue Skydance’s bid would prioritize Redstone at the expense of the rest of the company’s investors. In order to assuage those investors, Skydance submitted a revised offer in April that included a $3 billion cash injection as well as premium sweetener for a percentage of non-voting Class B shares. The revised offer also considered having Redstone, who is already set to get a premium for her shares, take less cash and keep more equity in Paramount.

Though the special committee let the exclusivity window on negotiations with Skydance expire with no deal last month, the two parties have continued to explore a possible deal. Skydance submitted another restructured bid on Thursday that increased its cash offer to make a deal more equitable for Class B stockholders. Specific terms for the latest bid could not immediately be learned.

In addition to the Skydance, Sony Pictures Entertainment and Apollo Global Management submitted a joint $26 billion all-cash offer for the company, which would see the former take a majority stake and operational control and the latter take a minority stake. That bid followed a separate offer by Apollo to solely acquire Paramount Pictures, which was rebuffed. While the pair signed NDAs to begin discussions with Paramount, The New York Times reported that they have since backed away from the original offer.

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Redstone has long been opposed to any deal for the company that breaks up its assets, though an individual familiar with her thinking previously told TheWrap that she is open to finding a deal in the best interest of Paramount shareholders and supports the independent special committee reviewing the Sony-Apollo bid. However, Sony and Apollo could potentially run into regulatory scrutiny due to the FCC’s limitations on foreign ownership and national television ownership.

The Journal reports that Hollywood producer Steven Paul has also been lining up financing for a bid for National Amusements of around $3 billion and that at least one other investor group has also expressed interest in purchasing National Amusements, citing sources familiar with the matter.

Paramount also has the option of continuing to go it alone with its newly formed Office of the CEO, which replaced former Paramount CEO Bob Bakish.

The latest update comes ahead of Paramount’s June 4 annual meeting. The company, which has a market capitalization of $8.3 billion as of Friday’s close, has seen its shares fall 17% year to date, 24% in the past six months and 22% in the past year.

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