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National Amusements, which controls Paramount Global (NASDAQ:PARA) through a voting stake and owns a movie theater chain, is in exclusive talks to sell itself to Skydance Media.
Under the terms of a deal being discussed between Shari Redstone’s National Amusements and Skydance, Redstone’s firm would receive more than $2 billion in cash as part of the first step of the transaction, according to a WSJ report late Friday, which cited people familiar.
After the National Amusements deal, Paramount (PARA), would acquire Skydance in an all-stock deal valued at about $5 billion, according to the WSJ. Separately, Skydance could provide a “substantial” cash infusion to Paramount to help its balance sheet and pay down debt.
Under the terms being discussed, Redstone would receive cash, while investors with nonvoting shares would get shares in the combined company and wind up with a diluted shareholding, the WSJ said.
CNBC’s David Faber reported on Thursday that under the plan being contemplated, there would be a need to raise as much as $3 billion in new equity by Paramount (PARA), reiterating his reporting from late February. Skydance’s David Ellison and his partners would step up for a “good amount” of that equity, but it would be “dilutive.”
CNBC also reported on Friday that Ellison is interested in taking either a substantial minority stake (around 45%) or a small majority stake by combining its studio assets with the iconic Hollywood brand and seeking newly raised equity along with its partners, RedBird Capital Partners, and KKR.
Paramount stock has been on the move over the past week as stories about a potential deal swirl. On Friday, the company’s nonvoting Class B shares (PARA) fell 3.2%—newly issued equity would be dilutive to economic shareholders — while the voting class A (NASDAQ:PARAA) gained 1.7%.
Redstone has reportedly reached a tentative deal to sell her stake to Skydance, while Paramount is also said to have weighed offers of $26B from Apollo Global Management (APO) and offers from entrepreneur Byron Allen and Warner Bros. Discovery (WBD).
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