Skydance and Paramount have agreed on new M&A deal terms

Variety

Skydance and its partners, RedBird Capital and KKR, sweetened the original buyout offer to make it more attractive to nonvoting shareholders of Paramount Global.
Now, the deal awaits approval by Shari Redstone, non-executive chair of Paramount Global, whose National Amusements Inc. owns 77% of the voting shares in Paramount Global.
The Skydance-Paramount merger would not require approval by Paramount’s Class B shareholders.
New details of Skydance’s deal terms were reported earlier by the Wall Street Journal and CNBC.
Reps for Skydance, Paramount Global and the Paramount board’s special committee declined to comment.
The pact proposes that Skydance will acquire the shares of NAI for roughly $2 billion in cash, thereby assuming control of Paramount Global.
Paramount Global is holding its 2024 annual shareholders meeting on Tuesday (June 2) starting at 9 a.m.
ET, but it is unlikely that a deal with Skydance will officially be a go by then.

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The months-long MandA drama on Paramount Global might soon be coming to an end.

Variety has confirmed that a complex deal that would combine Skydance and Paramount while keeping Paramount publicly traded has been reached between the special committee appointed by Paramount Global’s board of directors to review M&A proposals and David Ellison’s Skydance Media and his private-equity backers. Skydance, along with RedBird Capital and KKR, sweetened the initial takeover offer to increase its appeal to Paramount Global’s nonvoting shareholders.

The transaction is currently awaiting approval from Paramount Global’s non-executive chair, Shari Redstone, whose National Amusements Inc. holds 77% of the shares with voting rights in Paramount Global. The conditions of the Skydance-NAI portion of the agreement have not yet been finalized, and Redstone has not formally decided whether or not to move forward with the deal, according to sources. Should she consent, the media conglomerate and its predecessor companies would no longer be under the family’s decades-long control.

It would not be necessary for the Class B shareholders of Paramount to approve the Skydance-Paramount merger.

The price of Paramount Global’s Class B shares was up 7.5 percent on Monday to roughly $12.80 per share, following rumors that the Skydance-Paramount deal might be closing. The Wall Street Journal and CNBC had earlier disclosed new information regarding the terms of Skydance’s acquisition.

Representatives for Paramount Global, Skydance, and the special committee of the Paramount board declined to comment.

In a statement to Variety, a representative for NAI stated, “We are reviewing the financial terms of the proposed Paramount/Skydance transaction that we received over the weekend.”. “.

Somewhat less than half of Paramount Class B shareholders’ stock will be available for sale for $15 per share under the new offer from Skydance-RedBird-KKR, with the remaining shares being converted into shares in the newly combined Paramount-Skydance, according to sources.

According to the agreement, Skydance would take over Paramount Global by purchasing NAI’s shares for about $2 billion in cash. After Skydance and Paramount combined, Skydance-RedBird-KKR would own roughly two-thirds of the combined Paramount-Skydance (with legacy Class B Paramount Global shareholders holding the remaining portion), with Skydance valued at less than the $5 billion under the previous offer. In addition, Skydance and its financial partners would give Paramount $12.5 billion in cash, with the goal of using that money to pay down Paramount’s $140.6 billion in long-term debt (as of the end of March).

This Tuesday, June 2, beginning at 9 a.m., is Paramount Global’s 2024 annual shareholders meeting. me. ET, but by then, it’s unlikely that a deal with Skydance will be finalized.

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