In This Article:
Paramount Global stock (PARA) fell further on Wednesday after Shari Redstone, who controls Paramount through her family's holding company National Amusements (NAI), ended merger talks with Skydance Media, NAI confirmed in a statement.
The stock was down about 2% in early trading after sinking nearly 8% on Tuesday on the news.
As first reported by the Wall Street Journal, Redstone will now likely pursue a sale of just NAI, rather than attempting to merge Paramount into another company. Hollywood producer Steven Paul has reportedly expressed interest, along with media executive Edgar Bronfman Jr.
It's a surprising development, considering an independent special committee of Paramount's board recently recommended the economics of the Skydance deal after months of back-and-forth talks. The Journal said the committee was slated to vote on the Paramount merger with Skydance on Tuesday afternoon.
In a statement, National Amusements said it was not able "to reach mutually acceptable terms regarding the potential transaction with Skydance Media for the acquisition of a controlling stake in NAI."
"NAI is grateful to Skydance for their months of work in pursuing this potential transaction and looks forward to the ongoing, successful production collaboration between Paramount and Skydance," the statement read. It will continue to support and "explore opportunities to drive value creation for all Paramount shareholders." Paramount declined to comment.
Outside of Skydance, other interested parties in Paramount have included Sony Pictures Entertainment and private equity firm Apollo Global Management, along with Warner Bros. Discovery (WBD), media mogul Byron Allen, and others. (Disclosure: Yahoo Finance is owned by Apollo.)
Notably, Shari Redstone had consistently favored the Skydance deal over the other offers, according to multiple reports.
Skydance, which has previously collaborated with Paramount on the production of popular film franchises, including "Mission Impossible," "Top Gun: Maverick," and "Transformers," revised its offer multiple times after nonvoting shareholders expressed concerns over the terms of its first deal, which was valued at $5 billion.
The latest offer, valued at a sweetened $8 billion, included Shari Redstone selling National Amusements' controlling stake in Paramount for around $2 billion, according to CNBC. National Amusements owns approximately 10% of Paramount's equity capital value and maintains 77% of voting shares.
Backed by private equity firms RedBird Capital and KKR, Skydance would have then merged its studio business with Paramount's at a reported price that valued the legacy media giant at just under $5 billion. Skydance and its affiliates would have also offered a cash injection of $1.5 billion to help pare down Paramount's debt, the report added.