Sony Pictures and Apollo Global Management have officially come forward to offer $26 billion for Paramount Global. The offer coincided with the conclusion of the exclusivity period between Paramount and Skydance Media, which ends on May 3.
Since earlier this year, 2024 Skydance, in collaboration with RedBird Capital, has been in negotiations with Paramount. However, the initial offer, which appears to primarily benefit Shari Redstone, which controls Paramount through National Amusements’ ownership of Class A, has encountered shareholder backlash.
Furthermore, Skydance returned to negotiations with what sources claim to be its “best and final” offer for Paramount, on April 29, 2024, comprising a combination of cash and stock. Notably, the revised structure aimed to address shareholder concerns by benefiting Class B shareholders. The deal offers Skydance acquiring a controlling interest in Paramount through stock, followed by Paramount’s acquisition of Skydance for approximately $5 billion.
Additionally, rising by 13%, Paramount Global shares experienced a notable surge following the announcement of the acquisition offer from Apollo and Sony Entertainment. The day concluded with Paramount’s shares reaching $13.86 each on Thursday. If the amalgamation of Sony Pictures with Paramount Pictures proceeds, it could potentially lead to significant layoffs.
Furthermore, reports from last month indicate Sony’s consideration of a joint bid with Apollo for the complete acquisition of Paramount Global. However, before this Apollo’s proposal of offering $27 billion including debt, and the second, an $11 billion bid solely for Paramount Pictures, were both rejected by Paramount Global board’s special committee.
Meanwhile, Sony would assume the role of majority owner in the combined entity under the proposed bid with Apollo. This would involve merging Sony Pictures Entertainment into a joint venture with Paramount Global. Furthermore, to facilitate the deal both Sony and Apollo are expected to contribute cash. However, the fate of CBS’s 28 local TV stations remains uncertain. FCC regulations prohibit foreign entities, such as Tokyo-based Sony, from holding majority ownership control of broadcast TV stations. Therefore, to comply with regulatory requirements, Sony would need to establish a separate U.S. ownership structure for the station group.