Sony Pictures, Apollo Offer to Buy Paramount for $26 Billion in Cash
In the latest twist in Paramount Global‘s M&A saga, Sony Pictures Entertainment and Apollo Global Management reportedly have made a bid to take Paramount private with an all-cash buyout offer of $26 billion.
Sony and private-equity giant Apollo submitted an offer letter Wednesday to Paramount Global, the Wall Street Journal reported Thursday. The report comes as Paramount Global board’s special committee established to consider M&A proposals is evaluating the best and final offer from Skydance Media to merge Paramount and Skydance, while keeping Paramount Global public. Shari Redstone, the controlling shareholder of Paramount Global, is known to prefer deal with David Ellison’s Skydance, whose bid is backed by RedBird Capital Partners and KKR.
A rep for the Paramount Global board’s special committee declined to comment. Reps for Apollo and Sony Entertainment didn’t immediately respond to a request for comment.
It’s not clear how Paramount’s board will proceed on the Sony-Apollo proposal, having rejected previous overtures from the PE company. If it happens, the combination of Sony Pictures with Paramount Pictures would likely result in mass layoffs — and knock the number of major Hollywood studios from five to four, after Disney took over 20th Century. Sony Corp., which acquired Columbia Pictures in 1990 for $3.5 billion, is the largest studio operator in the industry that does not have a broad-scale direct-to-consumer streaming play.
Amid the deal wrangling, Bob Bakish earlier this week was removed as CEO of Paramount Global, replaced by a triumvirate of senior execs.
Word emerged earlier this month that Sony was mulling a joint bid with private-equity giant Apollo for Paramount Global. Apollo had previously offered more than $27 billion for Paramount Global (including debt) and prior to that floated an $11 billion offer for just Paramount Pictures. Both of Apollo’s prior overtures were rebuffed by the Paramount Global board’s special committee — and it remains to be seen whether Redstone and the Paramount special committee are open to considering the new Sony-Apollo offer.
Under the proposed bid with Apollo, Sony Corp. would combine Sony Pictures Entertainment into a joint venture with Paramount Global. Sony and Apollo would both contribute cash to finance the deal, with Sony the majority owner. What’s unclear is what would happen to the 28 local TV stations CBS owns; FCC rules bar foreign entities (i.e. Tokyo-based Sony) from having majority ownership control of broadcast TV stations, so Sony would need to carve out a separate U.S. ownership structure for the station group.
In the Skydance scenario, Paramount Global would remain a publicly traded entity, with Skydance and its financial backers replacing Redstone as the controlling shareholders of Paramount. Ellison would serve as CEO of the merger Paramount-Skydance. Jeff Shell, the former NBCUniversal CEO who leads RedBird alongside founder and managing partner Gerry Cardinale, would have a key management role in a reconfigured Paramount Global.
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