After months of negotiations, Shari Redstone walked out of Skydance’s $8 billion offer. What comes next?
After months of negotiations, Paramount Global’s Shari Redstone ended talks of a merger with Skydance Media, the entertainment company under David Ellison. Producer Steven Paul and former Warner Bros Music CEO Edgar Bronfman remain as bidders.
The Paramount saga started in early 2024 when the company opened for third-party offers. The legacy media firm is currently struggling under a $15 billion long-term debt pile and an unprofitable streaming service. Paramount’s stock price dropped by 23.33% year-to-date despite a better-than-expected first quarter.
David Ellison brought forward an $8 billion offer for a merger and acquisition with Skydance Media. The bid was backed by David Father’s Larry Ellison, co-founder and CEO of Oracle, and RedBird Capital.
The deal involved a $2 billion purchase of Redstone’s stake in Paramount Global. Redstone’s National Amusements International (NAI) owns 77% of Paramount’s voting shares, making her the sole potential decision-maker on the board.
Additionally, to make the deal more appealing for Class-B shareholders, Skydance offered them a $15-a-share buyout option for a total of $3.5 billion. Finally, Paramount Global would have acquired Skydance Media for $5 billion, merging assets and controlling positions.
Despite the offer, Class-B shareholders would have likely sued Redstone for accepting the deal, a major point in the negotiations between NAI and Skydance.
New bidders
In its statement following the refusal, NAI said it “supports the recently announced strategic plan being executed by Paramount’s Office of the CEO as well as their ongoing work and that of the Company’s Board of Directors to continue to explore opportunities to drive value creation for all Paramount shareholders.”
Redstone was most likely unhappy with Skydance’s offer to Class-B shareholders, wanting to maximize the deal for herself.
At the moment, two other bidders approached Redstone for her Paramount stake. New York-based producer Steven Paul reportedly made an offer backed by its company Crystal Sky Pictures.
Paul is a friend of Redstone and reportedly received strong pressure to make an offer alone. The deal would involve only Redstone’s stake, making it simpler than Skydance’s previous offer. According to people close to the matter, this would not stop the lawsuits.
Another high-profile offer comes from Edgar Bronfman Jr., who is also the latest bidder joining the fray.
Bronfman is the former chief of Universal and Warner Bros Music. Sources told industry outlets including Deadline and Variety that Bronfman is a serious bidder who could provide the cash immediately. The deal is reportedly a $3 billion offer for Redstone’s stake.
Without Skydance, Redstone will use her enormous influence to get the best deal possible for NAI, without consideration for the other shareholders.
