Sony Pictures, Apollo Offer to Buy Paramount Global for $26 Billion in Cash

03.05.2024

 

In a fresh development in Paramount Global’s merger and acquisition story, Sony Pictures Entertainment and Apollo Global Management have jointly proposed to take Paramount private with an all-cash buyout offer of $26 billion. The bid, including debt assumption and open to negotiation, marks a premium over Paramount’s current $22 billion enterprise value.

This bid emerges as Paramount Global’s board’s special committee, evaluating M&A proposals, weighs Skydance Media’s offer to merge with Paramount while remaining public. Paramount’s controlling shareholder, Shari Redstone, favors a deal with Skydance, supported by RedBird Capital Partners and KKR.

Paramount Global and its special committee declined to comment, as did representatives for Apollo and Sony Entertainment.

Paramount Global’s shares surged 13% on news of the bid from Apollo and Sony Entertainment, closing at $13.86 per share.

The board’s response to the Sony-Apollo proposal remains uncertain, considering past rejections of Apollo’s overtures. Discussions with Skydance may extend beyond the exclusive negotiating window ending Friday.

A potential Sony-Paramount merger could lead to significant layoffs and reduce major Hollywood studios to four. Sony Corp., lacking a broad-scale direct-to-consumer streaming platform, is the largest studio operator without one.

Amidst negotiations, Bob Bakish was replaced as Paramount Global CEO by a leadership trio: CBS chief George Cheeks, Paramount Pictures CEO Brian Robbins, and Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks.

Earlier reports hinted at Sony’s joint bid with Apollo for Paramount Global. Apollo’s prior offers were rejected by the board’s special committee.

Under the proposed bid, Sony would hold a majority stake in the merged entity. Sony Pictures Entertainment would merge with Paramount Global, with both Sony and Apollo contributing cash. Uncertainty remains regarding the fate of CBS’s 28 local TV stations, given FCC restrictions on foreign ownership.

Alternatively, in the Skydance scenario, Redstone would sell her stake in National Amusements to Skydance, which would then merge with Paramount Global in an all-stock deal. Paramount Global would remain publicly traded, with Redstone receiving up to $2 billion and Skydance paying a premium for Paramount Global shares. Skydance CEO David Ellison would lead the merged entity, with Jeff Shell playing a significant role.

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