The Redstone family and independent film producer David Ellison are making moves to appease disgruntled Paramount investors in a potential change of control at Paramount Global. Ellison’s Skydance Media is looking to purchase $3 billion of Paramount shares at a premium to bolster the company’s financial position. Discussions are ongoing regarding the allocation of this investment towards share buybacks and debt reduction.
Meanwhile, the Redstones, who hold a majority of Paramount’s voting shares, are considering granting nonvoting shareholders a say in any transaction. However, the board is yet to reach a final decision on this matter. The latest proposal from Skydance includes a reduced payout for the Redstone family.
Both parties are working towards a resolution amidst significant shareholder unrest. The recent Skydance bid is being touted as a ‘best and final offer’ by multiple sources. Paramount’s board has been cautious in accepting the deal due to resistance from other investors. In the interim, CEO Bob Bakish is expected to be temporarily replaced by a management committee.
Ellison, son of Oracle Corp. founder Larry Ellison, has been engaged in exclusive discussions with an independent committee of Paramount directors regarding a potential transaction. His offer entails acquiring the controlling shares from the Redstone family, injecting additional capital, and integrating Skydance into the company.
Partners in Ellison’s Skydance venture include RedBird Capital Partners and KKR & Co. The deal, although not formally announced, has faced opposition from shareholders who view it as a means for the Redstones to exit, potentially diluting the stakes of nonvoting shareholders. Paramount’s Class B nonvoting shares have experienced a 19% decrease in value this year.
Paramount, the parent company of CBS and MTV, has been grappling with the shift from traditional TV to streaming platforms. The company’s television channels have encountered challenges in adapting to the evolving media landscape.
