Paramount Global (PARA) has been at the center of media merger talks for years. Now the company’s fate could soon be determined, with a key trading window set to expire on Friday.
National Amusements, the holding company run by Shari Redstone, is in exclusive talks with David Ellison’s Skydance Media to sell its controlling stake in the media giant, according to a source familiar with the matter. Skydance has previously collaborated with Paramount on the production of popular film franchises, including “Mission: Impossible,” “Top Gun: Maverick” and “Transformers,” among others.
Paramount’s exclusivity window with Skydance expires on Friday, although it’s possible the deadline could be extended. Paramount’s non-voting shareholders have publicly expressed concerns about the terms of a deal with Skydance, which they say unfairly benefits Redstone at the expense of other investors.
Skydance isn’t Paramount’s only suitor, either. Sony Pictures Entertainment and private equity firm Apollo Global Management have formally expressed interest in buying the media giant for $26 billion, according to a source familiar with the situation. (Disclosure: Yahoo Finance is owned by Apollo.)
Paramount’s fate ultimately depends on what Shari, daughter of the late media mogul Sumner Redstone, decides.
“We do not expect Paramount, as currently constituted, to operate independently for much longer,” Morningstar analyst Matthew Dolgin wrote in a note to clients on April 30.
Amid turmoil over its future, Paramount recently announced the departure of its CEO Bob Bakish, who was allegedly at odds with Redstone because of a Skydance deal.
“I’ve never seen anything like it,” said Ariel Investments co-CEO John Rogers told Yahoo Finance. “It’s really crazy to have the CEO fired in the middle of earnings season, in the middle of an M&A transaction, in the middle of a crucial negotiation with Charter Communications.”
Dolgin added that Bakish’s resignation signals “the company is simply biding its time until it merges with Skydance or accepts a superior takeout offer.”
Paramount M&A Rumors
Paramount has long been seen as a potential acquisition target due to its small size relative to competitors. The company has a current market cap of just about $10 billion, compared to Disney’s (DIS) $200 billion and Netflix’s (NFLX) $240 billion.
Rumors of a sale have circulated the company for years following highly publicized corporate governance issues dating back to about a decade ago.
In 2015, Sumner Redstone – the billionaire media mogul whose vast empire included Viacom and CBS, as well as National Amusements – became the subject of shareholder protest amid deteriorating health.
Redstone’s mental capacity was often questioned and even led to a civil action that was eventually fired. One year later, the fight for control of the company reached a feverish level.
Sumner Redstone got down from his position as president of CBS and Viacom in February 2016, sparking a bitter legal battle between former Viacom president Philippe Dauman and Shari Redstone over who would ultimately control the Viacom-CBS empire.
Shari Redstone eventually won that fight, with the family maintaining controlling interest. However, the legal drama sparked a severe leadership change at all levels, with Bob Bakish eventually placed in charge of Viacom in December 2016. Sumner left his board position a few days later.
Public turmoil led to increased talk surrounding a potential sale throughout the late 2010s, before and after the eventual merger from Viacom and CBS Corp. in 2019.
Over the years, telecommunications giants including ATT (T) and Verizon (VZ) reportedly expressed interest in buying CBS, while tech giants Litter (AAPL) and Netflix intended to acquire a major studio like Paramount Pictures to bolster their respective streaming services.
The latest flurry of M&A reports surrounding Paramount began with Warner Bros. CEO Discovery, David Zaslav meeting with Bakish in late 2023 to discuss a potential merger, as first reported by Axios.
That opened the floodgates of mergers and acquisitions, with media mogul Byron Allen offering $30 billion to buy all of Paramount’s outstanding shares, including debt, at the start of the year.
The company also considered selling parts of its business. BET It is Show time were two assets that have been the subject of consistent sale rumors in recent years. Paramount ultimately decided against selling the company in parts, largely due to Redstone’s preference to keep the company together.
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, linkedin, and email her at alexandra.canal@yahoofinance.com.
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