Since late last year, Paramount, which was acquired by the late Sumner Redstone, has been for sale
In a transaction that gives producer David Ellison control over the legendary Hollywood studio, Paramount Global decided to merge with Skydance Media, capping one of the most spectacular purchases in the history of the business.
According to a statement issued by the business on Sunday, Paramount Chair Shari Redstone consented to sell her family’s National Amusements Inc., which holds around 77% of the voting shares in Paramount, for $2.4 billion as part of the intricate agreement that took months to complete.
The agreement represents a sharp change in direction following the breakdown of negotiations between Redstone and Ellison, the son of Oracle Corp. co-founder Larry Ellison, last month. Redstone’s decision to halt talks at that time stunned the board and infuriated staff members and investors, which caused the price to plummet.
RedBird Capital Partners and the Ellison family have committed to investing over $8 billion in the company. This comprises $4.5 billion for the purchase of Paramount stock and $1.5 billion to assist in paying down the company’s debt.
The troubled film production company that owns CBS and MTV, may be able to start over with new owners and money. The legendary Hollywood firm, burdened with over $14 billion in debt, has found it difficult to compete in the streaming market as viewers of cable TV have abandoned conventional channels like CBS and Nickelodeon and canceled their subscriptions. In the first quarter, the corporation lost $554 million, or 87 cents per share.
Ellison, forty-one, will lead the company as chairman and CEO. The next president will be former NBCUniversal executive Jeff Shell. Having grown up surrounded by Silicon Valley titans such as Steve Jobs, Ellison thinks the company may prosper if it makes greater investments in technology.
The Ellison-led consortium will hold almost 70% of the company’s outstanding shares if the acquisition closes. The sellers might look for higher offers for 45 days. An investor call with Skydance and Paramount is scheduled at 8:30 AM Eastern Standard Time.
For three decades, the Redstone family has controlled Paramount, the movie studio behind movies including The Godfather and Titanic. Nevertheless, since the Redstones reorganized CBS Corp. and Viacom Inc. to form Paramount Global in 2019, the shares have lost more than half of their value.
The 70-year-old Redstone opposed a deal with other interested parties in favor of a merger between Paramount and Skydance, which she felt would be best for her family and the company’s legacy.
Since late last year, Paramount, which was acquired by the late Sumner Redstone, the father of Shari Redstone, has been for sale. A $26 billion purchase was proposed by Apollo Global Management Inc. and Sony Group Corp., two suitors that National Amusements has held conversations with. However, that offer was viewed as risky and was expected to encounter stringent regulatory examination. It would have involved a foreign owner and the possible combination of two big Hollywood studios. |
Barry Diller, the eighty-two-year-old chairman of IAC Inc. and the former head of Paramount Pictures, has shown interest in the business more lately. Longtime media executive Edgar Bronfman Jr. has also done so.
Following the departure of CEO Bakish in April, three top executives make up the management committee that currently leads Paramount.