Sony and Apollo Offer $26 Billion to Acquire Paramount as Deadline Approaches

Skydance and Paramount were given just one month to agree on union terms. Friday May 3, the deadline will have expired and the period of special talks between the two parties will end. Sony and Apollo has decided to jump on the opportunity by making a joint offer of 26 billion dollars to acquire the media and entertainment giant, reports the “Wall Street Journal”.

With this offer, Sony would become the majority shareholder, with Apollo taking a minority stake and ceding operational control. The non-binding proposal is above all a sign of interest, according to the New York daily. It should be a starting point for future discussions. The interest is not very new: at the end of March, the Apollo investment fund had already offered the same amount for the takeover of Paramount.

Long feuilleton

The offering from Sony Pictures Entertainment and Apollo Global Management is just the latest twist in the long running soap opera. In recent years, the stock market value of the television and cinema group has declined, another victim of the streaming war.

Its directors have invested heavily in Paramount+, its video-on-demand service. Last September it had more than 60 million subscribers but is accumulating losses. Reluctantly, Shari Redstone, the group’s main shareholder, opened the door to a sale.

For several months, Paramount Global, which mainly owns the CBS and MTV channels, has been the object of desire. Netflix knocked on his door, and Warner and Paramount for a time considered a union. Since the beginning of April, it has been Skydance Media, the production company of David Ellison, the son of billionaire and co-founder of Oracle Larry Ellison, who has been in the forefront with a proposal of union.

Eliminate the boss

With a company Wing Dance , which includes private equity firms KKR and RedBird Capital, has reportedly offered to invest $3 billion at a premium to the current price to buy a controlling stake in Paramount, according to Bloomberg. But non-voting shareholders expressed their distrust against a transaction that could be very beneficial to the Redstone family, but would diminish them. The board, which is supposed to protect all shareholders and not just the controlling shareholder, could be against an agreement that is too unfair to the disadvantage of those do not have voting rights.

If it was still too calm, the tumultuous period of negotiations between the two groups was marked by the dismissal of Paramount CEO Bob Bakish. He would, among other things, have led discussions parallel to those with Skydance, without the approval of the board of directors, for a partnership with Comcast in streaming.