Paramount and Skydance inch closer to a merger as key hurdle looms
Paramount Global and Skydance Media are making progress on a deal that would merge the media companies and buy out controlling shareholder Shari Redstone.
Paramount Global and Skydance Media are making progress on a deal that would merge the media companies and buy out controlling shareholder Shari Redstone.
Paramount Global’s special committee and David Ellison’s Skydance Media, backed by private equity firms KKR and RedBird Capital Partners, are narrowing in on how to value Skydance’s assets as part of a merger, as well as how much equity to add to the company as part of a recapitalization, according to people familiar with the matter.
The sides are close to agreeing on a value for Skydance. The entertainment company will be valued at around $5 billion and merged with Paramount Global, said the people, who asked not to be named because the discussions are private. Ellison and the private equity firms plan to raise roughly $4.5 billion to $5 billion in new equity. Some of that — about $2 billion — will be used to pay Redstone, and another substantial portion will be used to pay down debt.
The buyers would ideally like to get a deal done in May, said the people. Three of the people said that Paramount Global was slow to open a data room to the Skydance consortium, which has slightly pushed back the timeline on a deal. The exclusivity window on merger talks ends May 3, but the Skydance consortium wants to extend it by two weeks, said the people.
Skydance plans to name Ellison as CEO of Paramount Global and former NBCUniversal CEO Jeff Shell as the president, said two of the people. Current Paramount CEO Bob Bakish would depart the company, the people said.
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