Joint bid comes as media company’s board is considering merger deal with Skydance Media
In the latest twist in Paramount Global’s M&A saga, Sony Pictures Entertainment and Apollo Global Management have made a bid to take Paramount private with an all-cash buyout offer of $26 billion.
Sony and private-equity giant Apollo submitted a letter with the non-binding offer Wednesday to Paramount Global, as first reported by the Wall Street Journal. The bid, which would include the assumption of debt and could be negotiated, would be a premium over the company’s current $22 billion enterprise value.
The tag-teamed buyout bid comes as Paramount Global board’s special committee established to consider M&A proposals is evaluating the best and final offer from Skydance Media to merge Paramount and Skydance while keeping Paramount Global public. Shari Redstone, the controlling shareholder of Paramount Global, is known to prefer consummating a deal with David Ellison’s Skydance, whose bid is backed by RedBird Capital Partners and KKR.
Popular on Variety
Reps for Paramount Global and the board’s special committee declined to comment. Reps for Apollo and Sony Entertainment didn’t immediately respond to requests for comment.
Shares of Paramount Global jumped 13% on news of the offer from Apollo and Sony Entertainment, closing at $13.86 per share Thursday.
It’s not clear how Paramount’s board will proceed on the Sony-Apollo proposal, having rejected previous overtures from the private-equity firm. The company has an exclusive negotiating window with Skydance that ends Friday (May 3), but discussions among the parties could extend beyond that.
If it happens, the combination of Sony Pictures with Paramount Pictures would likely result in mass layoffs — and knock the number of major Hollywood studios from five to four, after Disney took over 20th Century. Sony Corp., which acquired Columbia Pictures in 1990 for $3.5 billion, is the largest studio operator in the industry that does not have a broad-scale direct-to-consumer streaming play.
Amid the deal wrangling, Bob Bakish earlier this week was removed as CEO of Paramount Global, replaced by a triumvirate of senior execs: CBS chief George Cheeks, Paramount Pictures CEO Brian Robbins and Chris McCarthy, president and CEO, Showtime/MTV Entertainment Studios and Paramount Media Networks.
Word emerged last month that Sony was mulling a joint bid with Apollo for the entirety of Paramount Global. Apollo had previously offered more than $27 billion for Paramount Global (including debt) and prior to that floated an $11 billion offer for just Paramount Pictures. Both of Apollo’s prior offers were rebuffed by the Paramount Global board’s special committee.
Under the proposed bid with Apollo, Sony would be the majority owner of the combined company. Sony Corp. would merge Sony Pictures Entertainment into a joint venture with Paramount Global. Sony and Apollo would both contribute cash to finance the deal. What’s unclear is what would happen to the 28 local TV stations CBS owns; FCC rules bar foreign entities (i.e. Tokyo-based Sony) from having majority ownership control of broadcast TV stations, so Sony would need to carve out a separate U.S. ownership structure for the station group.
Source : https://variety.com/2024/biz/news/sony-apollo-paramount-global-acquisition-offer-cash-1235981220