Topline
Paramount Global has opened acquisition negotiations with Sony and Apollo, The New York Times reported Sunday, after exclusive merger talks with Skydance lapsed Friday and the company continues to struggle following major first quarter losses and the departure of CEO Bob Bakish last week.
A woman's silhouette holds a smartphone with the Paramount Global logo in the background.
Key Facts
Sony and Apollo Global Management, a private equity firm, reportedly made a $26 billion all-cash offer to buy Paramount last week while the company was in talks to potentially merge with David Ellison's Skydance Media.
Skydance reached a tentative agreement last month to acquire the Paramount controlling stake of Shari Redstone, president of parent company National Amusements, but the two sides weren’t able to reach an agreement before talks lapsed Friday, which opened Paramount up to explore other options.
On Saturday, Paramount's special committee voted to start talks with Sony and Apollo, and continue pushing on negotiations with Skydance, the Times reported, citing three unnamed sources.
The Sony deal is likely the only other sale the company will consider apart from Skydance’s, Variety reported Friday, adding it is likely no deal to merge or sell Paramount will ever come to fruition because of regulatory hurdles and the threat of legal action from shareholders who said Redstone was given a “sweetheart deal” for her stake, The Wall Street Journal reported.
Bakish, who reportedly opposed the Skydance deal, stepped down as Paramount’s chief executive last week after rumors circulated he would soon be ousted.
The offer from Sony and Apollo would include assumption of Paramount's debt—Sony would take over control of operations as the majority shareholder, with Apollo taking a minority stake, according to the Journal.
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Key Background
Paramount Global has struck out on several deals and acquisition offers in recent months after reporting over $14.6 billion in debt. Earlier this year, it was reported that Paramount and NBCUniversal owner Comcast were considering combining their respective streaming services through a joint venture that had the potential to cut down on the cost of content production, combine marketing resources and help retain subscribers cutting down on their number of subscriptions. That deal never came to fruition, nor did an $11 billion offer from Apollo solely for Paramount Pictures, the company's production business. Warner Bros. Discovery also made a merger bid for Paramount earlier this year but backed out of talks in February. Last August, Paramount divested its publishing arm Simon & Schuster to private equity firm KKR in a $1.6 billion deal.
Big Number
$286 million. That’s how much Paramount reported in streaming losses in the first quarter.
Forbes Valuation
Skydance founder David Ellison is the son of Oracle co-founder Larry Ellison, who had a net worth estimated at $144.9 billion Sunday to make him the world’s fifth-richest person. Marc Rowan, CEO and co-founder of Apollo Global Management, has an estimated net worth of $6.5 billion. His co-founders, Leon Black and Joshua Harris, have estimated net worths of $14.1 billion and $8.4 billion, respectively. Shari Redstone, chair of media empire Paramount Global and daughter of media mogul Sumner Redstone, controls a $30 billion media empire. She was ranked at No. 37 on Forbes' list of the world's most powerful women last year.
Further Reading
CORRECTION (5/6): This article has been updated to reflect that Larry Ellison is the co-founder of Oracle.
