David Ellison's Skydance Media is close to clearing a major hurdle in its pursuit of Paramount Global.
The media giant's committee of independent board members has expressed its approval of Ellison's acquisition of the historic company, according to three people familiar with the situation who were not authorized to comment.
Formal approval by Paramount's special committee could come as soon as Monday, one of the people familiar with the matter said.
However, the agreement with Skydance is not completely closed. The deal still lacks the consent of Paramount's majority shareholder Shari Redstone, the sources said. Her support is key for any agreement to move forward.
Representatives for Paramount were not immediately available for comment.
The Redstone family owns a 77% controlling stake in Paramount Global through its holding company National Amusements Inc., giving Sumner Redstone's heirs enormous influence over the future of the owner of Paramount Pictures, MTV and Nickelodeon.
To complicate matters, as the Skydance sale process has dragged on, Redstone has drawn interest from at least two other buyers interested in National Amusements.
Late last week, Redstone was said to be considering such offers, including one that was higher than the nearly $2 billion for National Amusements and its voting shares in Paramount that Skydance and its partners offered the family.
Redstone has long preferred the Skydance proposal because it would keep intact the media company his father spent decades building into a behemoth with streaming giant CBS, the legendary Melrose Avenue movie studio and cable TV channels including MTV, BET, Nickelodeon and Comedy Central.
To win approval from the special committee, Skydance, which was joined in its bid by RedBird Capital Partners and private equity firm KKR, last week proposed setting aside funds to buy out certain non-voting Class B shareholders at $15 per share. action during a second phase. of the transaction. The parties worked over the weekend to develop those provisions.
Paramount shares rose 7% to $12.71 in midday trading.
To further boost the bid for Paramount, Oracle's billionaire chairman, Larry Ellison, agreed to help his son push the deal over the finish line, one of the sources said.
Paramount shareholders have long protested the second phase of the deal, when Ellison seeks to bring his company, Skydance, into Paramount. Paramount shareholders have said that absorbing Skydance would dilute their shares. Non-voting shareholders have also complained that the deal with Skydance would provide a bonus to Redstone and his family for their voting shares.
Film executive Shari Redstone arrives at the 2022 world premiere of “Top Gun: Maverick” aboard the USS Midway in San Diego.
(Robyn Beck/AFP via Getty Images)
The move in deal talks comes less than a month after Skydance's exclusive negotiating window expired.
Paramount board members have since agreed to consider a rival $26 billion bid from Sony Pictures Entertainment and Apollo Global Management, but those talks have lost momentum in recent weeks, people familiar with the matter said.
Sony, which has long been known as a cautious buyer, began to lose interest in Apollo's offering, believing it was too expensive, particularly given the struggles of Paramount's cable channels that still provide the bulk of revenue. company operations.
Sony's Tokyo-based parent company has not forgotten how it overpaid for the Sony/Columbia-Tri Star deal decades ago, so the company feared a repeat of the scenario with Paramount, one of the sources said.
The Wall Street Journal first reported that Redstone was considering other offers for National Amusements. On Monday, CNBC reported that the deal with Skydance was close to gaining approval.
