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PE target Paramount Global to merge with Skydance Media

Paramount, owner of Paramount Pictures movie and television studios, the CBS television network and CBS News, as well as a takeover target of private equity firm Apollo Global, is to merge with Skydance Media, according to a report by CBS News.

Skydance is the entertainment business founded by David Ellison, son of Oracle founder Larry Ellison.

Paramount also owns the Paramount+ streaming service, Nickelodeon, BET, MTV, Comedy Central and other media brands.

The transaction resolves months of speculation around the future of Paramount, which also reportedly attracted a $26bn bid from a consortium led by Sony Pictures and Apollo. Several top media and entertainment executives also reportedly showed interest in acquiring Paramount.

The merger will proceed in two stages. First, Skydance will pay $2.4bn for National Amusements, which holds 77% of Paramount’s voting shares. Shareholders with non-voting stock will receive $15 per share or one share of non-voting stock in the new company. Class A shareholders, excluding National Amusements, will receive $23 per share or the option to get 1.5333 non-voting shares in the merged entity. Paramount Global will then merge with Skydance in an all-stock transaction, valuing Skydance at $4.75bn.

Additionally, the deal allows other potential bidders 45 days to submit competing offers, aiming to address concerns that Skydance’s initial bid undervalued Paramount.

Under the terms of the proposed deal, Ellison will serve as chairman and CEO of Paramount, and Jeff Shell, chairman of RedBird Sports and Media, a unit of investment firm RedBird Capital Partners, will become president. Shell is the former CEO of NBCUniversal.

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