Paramount Global (NASDAQ: PARA) stock tumbled during intraday trading Tuesday following reports suggesting that Shari Redstone, who controls Paramount through her family’s holding company National Amusements (NAI), terminated merger talks with Skydance Media.
According to the Wall Street Journal report, Redstone appears poised to pursue a sale of National Amusements Inc. (NAI) alone, rather than pursuing a merger of Paramount into another entity. Hollywood producer Steven Paul and media executive Edgar Bronfman Jr. expressed interest in this potential sale.
This decision marks a surprising turn of events, especially considering that an independent special committee of Paramount’s board had recently recommended the economics of a potential merger with Skydance Media after extensive negotiations. The committee was scheduled to vote on the proposed merger on Tuesday afternoon.
National Amusements Statement
In response, National Amusements issued a statement, acknowledging its inability to reach mutually acceptable terms regarding the potential transaction with Skydance Media acquiring 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.”
Apart from Skydance, other interested parties in Paramount have included Sony Pictures Entertainment, private equity firm Apollo Global Management, Warner Bros. Discovery (WBD), media mogul Byron Allen, and others. It’s worth noting that Shari Redstone had consistently favored the Skydance deal over other offers.
Skydance, known for its collaboration with Paramount on hit film franchises like “Mission Impossible,” “Top Gun: Maverick,” and “Transformers,” made several revisions to its offer to address concerns raised by nonvoting shareholders. The latest offer, valued at $8 billion, included a sale of National Amusements’ controlling stake in Paramount for approximately $2 billion, and a cash injection of $1.5 billion to alleviate Paramount’s debt burden.
National Amusements holds about 10% of Paramount’s equity capital and controls 77% of its voting shares.
Paramount Global (NASDAQ: PARA) Stock Price Action
On Tuesday, PARA stock plunged 7.85%, closing at $11.04, marking a 9.80% decrease for the week. The trading volume was 36,348,660 shares, significantly higher than the average daily volume of 20.53 million.
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