Skydance Sweetens Offer For Paramount Global

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David Ellison’s Skydance has sweetened its offer to acquire Paramount Global, Deadline has learned, in an attempt to make it more palatable to the company’s Class B stockholders after they trashed the outlines of a previous deal and threatened to sue.

Ellison’s original offer was to buy out Par’s controlling shareholder Shari Redstone for a significant premium, resulting in a windfall for her, and then merge Skydance into Paramount keeping the combined company public. Stockholders wanted to be bought out at a premium as well.

Skydance, backed by Oracle co-founder Larry Ellison and Gerry Cardinale’s RedBird Capital, sweetened the offer once late last month — offering to buy out a certain number of Class A voting shares from stockholders other than Redstone — as an exclusive monthlong negotiating period with Par ended. That still left owners of the Class B non-voting stock, who are the majority of shareholders, furious.

The parameters of the revised bid couldn’t be learned immediately but Deadline understands that Skydance is putting more money in and restructuring the deal to make it more palatable to the Class B folks.

As the Skydance exclusive talks ended with no deal, Sony jumped in for a $26 billion bid with private equity giant Apollo, that was later downsized in some fashion in a letter of intent Sony signed with Par. about two weeks ago. Those conversations were not exclusive and Skydance remained in the mix.

The issue for Sony is not shareholders but regulators. Foreign ownership rules likely prevent Sony from owning CBS broadcast assets, which likely why its offer became more targeted. But it might not be a cakewalk to merge two major studios either. Skydance is safer, more certain, on the regulatory front and wouldn’t require a prolonged review amid possible opposition that can drag a deal out and sometimes end without one.

All offers are being evaluated by a special committee of Paramount’s board of directors. Three on that committee — Dawn Ostroff, Nicole Seligman and Frederick Terrell — will formally exit the board as of the company’s annual shareholder meeting next Tuesday. Another board memeber, Robert Kieger, will also be leaving. Par announced the upcoming departures — which will leave it with a greatly downsized board — earlier this year to widespread speculation on what it meant for a deal.

Par hasn’t said whether the three had continued to serve actively on the pared down committee after their pending departures were announced or what the committee composition is now, or will be after the meeting where shareholders vote for directors among other issues on the agenda. The committee in any case is just there for a recommendation, with Redstone the decider and, some feel, a wildcard.

Says one source with knowledge of the dealings, “At the end of the day, whatever the committee recommends to Shari, it’s up to her to decide. A deal’s not a deal without her.”

Hollywood insiders favor a Skydance deal over a Sony/Apollo takeover of Paramount Global. The reduction of a major studio strikes fear throughout the exhibition sector that fewer event films would exist in the long run, the sector currently weathering the aftermath of Covid, two strikes and a Disney-Fox merger which has reduced the supply of movies at multiplexes.