Paramount (PARA) shares soared on Monday following news of an $8 billion takeover agreement with David Ellison’s Skydance Media. The deal, which must be approved by Shari Redstone of National Amusements, has been recommended by an independent special committee of Paramount’s board.
The agreement comes after months of negotiations with various interested parties, including Sony Pictures Entertainment, Apollo Global Management, Warner Bros. Discovery, and others. As part of the deal, Redstone will sell her controlling stake in Paramount to Skydance for around $2 billion, while Skydance will merge its studio business with Paramount’s at a reported price of just under $5 billion.
Skydance, backed by RedBird Capital and KKR, will also inject $1.5 billion to help reduce Paramount’s debt. The deal includes the purchase of nonvoting shares at $15 each, with an option for shareholders to cash out at that price or convert their shares into the newly merged company.
Despite initial concerns from nonvoting shareholders over the terms of the deal, Skydance revised its offer multiple times to address their issues. The turmoil surrounding the agreement led to the departure of Paramount’s CEO Bob Bakish in April, with an interim “Office of the CEO” now in place.
The merger, valued at $8 billion, will see Skydance and RedBird owning two-thirds of the company, with the remaining third owned by nonvoting shareholders. Paramount’s annual shareholder meeting is set to take place on Tuesday morning, where the deal will likely be a hot topic of discussion.
