According to insiders, Sony Pictures and Apollo Global Management have officially expressed interest in buying Paramount Global for around $26 billion.
Meanwhile, Skydance Media, supported by RedBird Capital and KKR, is waiting to hear back from Paramount’s special committee on whether they’ll recommend Skydance’s bid to the main owner, Shari Redstone.
The special committee hasn’t given any feedback yet, but they might do so by Thursday. They could recommend accepting Skydance’s offer, reject it, or suggest changes.
No one involved is commenting on the situation at the moment.
If the special committee wants to keep talking to Skydance or Redstone needs more time to decide while still considering Skydance’s offer, they might extend the deadline, which is currently set for Friday.
If Skydance decides to walk away, Redstone could start negotiating with Sony and Apollo, which could mean a better payout for all shareholders.
Paramount Global’s stock rose over 12% when news broke that Sony and Apollo were interested. Redstone initially turned down Apollo’s offer to focus on talks with Skydance, which she prefers because it would keep Paramount together.
Private equity firms like Apollo tend to break up companies to make money, which is something Redstone wants to avoid. The offer from Sony and Apollo would make Sony the main shareholder and Apollo a minor one.
This might ease Redstone’s worries about Paramount being dismantled because Sony is a big player in Hollywood. A $26 billion offer for Paramount Global is higher than its current value of $22 billion.
However, the special committee would want to make sure the deal is financially sound and won’t face any regulatory issues, especially since Sony is not based in the U.S. They’d need to end talks with Skydance to pursue this option, which might make Skydance walk away as a bidder.
This move would be welcomed by some shareholders who aren’t happy with the Skydance deal. Skydance’s offer involved merging its assets with Paramount and paying Redstone nearly $2 billion for her stake.
Redstone might also argue for keeping Paramount Global independent. The recent removal of the CEO indicates a need for a new direction, which could include considering the Apollo-Sony bid if it’s in the best interest of shareholders.
