Shari Redstone, president of Paramount Global, attends the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on Tuesday, July 11, 2023.
David A. Grogan | CNBC
Skydance Media is ready to abandon its offer of global paramount unless it receives a firm commitment from majority shareholder Shari Redstone, following the latest offer from Apollo Global Management and Sony Pictures, according to a person familiar with the matter.
The exclusivity window for discussions between David Ellison's Skydance, backed by private equity firms RedBird Capital and KKR, and Paramount ends Friday and will not be extended, people familiar with the matter told CNBC's David Faber. Paramount shares rose following the report.
The consortium has been waiting to hear from Paramount's special committee on whether the panel will recommend its bid to acquire the company from Redstone. Now that Apollo and Sony have formally expressed interest in acquiring the company for around $26 billion, the Skydance group is looking to Redstone to reaffirm its commitment to the deal.
The Skydance consortium is not interested in remaining a bid for Apollo and Sony, one of the people said. Still, depending on what Redstone says, Ellison might be willing to work with her, a second person said.
Spokespeople for Skydance, Redstone's National Amusements and Paramount's special committee declined to comment Friday.
Apollo and Sony made their latest offer on Thursday, CNBC previously reported. The special committee is currently considering the offer, the people said.
As part of the latest Skydance deal on the table, Redstone could receive less than $2 billion for its majority stake in Paramount, which is less than Skydance's initial offer. The consortium is providing additional capital to pay Class B common shareholders at a nearly 30% premium to the undisturbed trading price of about $11 per share, CNBC reported. In total, Redstone and Skydance would contribute $3 billion, with the vast majority going to Class B shareholders, according to people familiar with the matter.
Skydance's valuation as part of the deal remains around $5 billion, the people said. Like the Skydance offer, the Apollo-Sony offer includes a control premium for Redstone, according to people familiar with the matter.
Redstone previously rejected an offer from Apollo in favor of exclusive talks with Skydance. Redstone has preferred a deal that would keep Paramount together, as would Skydance's offer, CNBC previously reported. A private equity firm is likely to dissolve the company.
