A special committee of Paramount Global’s board of directors says it is “bound” by a pending agreement to merge with Skydance Media and will not consider an 11th-hour offer from a rival bidder.
In a statement provided to Deadline, a spokesperson for the committee formed last year to evaluate opportunities and steer a merger, said investment group Project Rise Partners effectively arrived too late to the party.
“The transaction agreement between Paramount and Skydance Media enabled the Special Committee to pursue a superior proposal during the now-expired 45-day go-shop period, during which representatives of the Special Committee contacted more than 50 third parties to determine whether they had an interest in making a proposal to acquire Paramount,” the statement said. “Project Rise Partners did not make a proposal during such period, nor during the prior seven-month sale process for Paramount. It is unclear what PRP’s objectives are; however, Paramount is bound by its agreement with Skydance Media and there will not be any engagement with PRP in contravention of such agreement.”
The Paramount-Skydance deal was set last July after a months-long saga, with numerous parties looking into throwing their hat into the ring for the century-old Hollywood mainstay. Barry Diller, Sony Pictures Entertainment, private equity giant Apollo and a group of investors led by Seagram heir Edgar Bronfman Jr. were among the suitors. Skydance was able to leverage its longstanding ties with Paramount as a co-finance partner. CEO David Ellison, backed by his father, Oracle co-founder Larry Ellison, was also seen as having significant resources and passion to invest in the company’s core film, TV and streaming businesses.
After multiple offers from Skydance, the company and Paramount agreed on a two-step transaction worth about $8 billion. The dual-class structure of Paramount stock made the fine points of the deal tricky to nail down, with a number of stakeholders accusing controlling shareholder Shari Redstone of furthering her own interests at the expense of holders of Class B shares. A number of notable Class B shareholders voiced their disapproval of earlier versions of the deal, though the complaints diminished as Skydance sweetened its offer.
Lawyers for Project Rise Partners sent the committee a letter on Friday advising them that the body was obligated to consider its offer, which principals described as superior to the $8 billion Skydance deal. PRP’s offer was “increasing,” the letter said, to $19 per Class B share, compared with the $15 offered by Skydance, according to a report by Variety. (Axios last October had also reported on PRP agitating for consideration of its post-deadline bid.)
Curiously, the Friday letter also drew a contrast with Skydance in terms of staffing. It asserted that PRP (whose backers include Daphna Edwards Ziman, co-chairman of TV network Cinémoi, and real estate finance exec Moses Gross) would add to Paramount’s headcount despite the widespread cutbacks reshaping the entertainment business. (Paramount itself shed 15% of U.S.-based workers in recent months.)
Despite plans to invest significant resources from the Ellisons and minority partner RedBird Capital in bulking up Paramount’s streaming platforms and studio operations, job cuts are expected at Paramount once Skydance assumes control. Among other things, the company faces significant challenges in managing its sizable linear TV assets, and last year signaled as much to Wall Street when it took a $6 billion write down on the value of its cable networks.
When the Skydance bid was first accepted by the special committee last summer, the agreement stipulated that a 45-day “go-shop” window would enable the board to explore alternatives. As an SEC filing affirmed this month, representatives of Project Rise Partners were in contact with the special committee but their proposal did not get submitted until several days after the go-shop period expired.
The idea of a last-minute twist to the Paramount merger melodrama is migraine-inducing to some observers. “It’s just silliness,” one person familiar with the merger process said of the PRP saber-rattling. The entreaties by the investor group come as the deal is falling under fresh scrutiny from regulators at the Federal Communications Commission, which has taken issue with political coverage by Paramount’s CBS News.
FCC Chair Brendan Carr, appointed to the post by President Trump, has revived complaints of “news distortion” by CBS due to its editing of a 60 Minutes interview with former Vice President Kamala Harris. Trump also has filed a lawsuit in Texas over the Harris segment, prompting internal discussion at Paramount about ways to settle the suit in order to allow the merger to proceed to a close. Trump’s objections are creating these potential roadblocks despite the fact that Redstone and Ellison are both longtime supporters of the president, with the latter appearing last week at a White House news conference about a major new AI initiative.
Reps for Redstone, Paramount Global and Skydance declined to comment when contacted by Deadline.
In a recent announcement, the special committee of the Paramount board has made it clear that they are “bound” by the merger pact with Skydance and will not be engaging with any rival bidders. This decision comes after much speculation and interest from other potential buyers.
The committee emphasized that they have a fiduciary duty to uphold the terms of the agreement with Skydance and will not be swayed by any competing offers. This stance solidifies their commitment to the current merger and sends a clear message to other parties that their efforts will not be entertained.
While this news may disappoint some who were hoping for a bidding war, it ensures stability and continuity for Paramount’s future. The committee’s unwavering support for the Skydance merger demonstrates their confidence in the deal and their belief that it is in the best interest of the company and its shareholders.
Overall, this decision reinforces the Paramount board’s dedication to seeing the merger through to completion and sets a firm boundary against any potential distractions or interference from outside parties.
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- Paramount Board
- Special Committee
- Merger Pact
- Skydance
- Rival Bidders
- Acquisition
- Mergers and Acquisitions
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