Shari Redstone, President of National Amusement and Vice Chairman of CBS and Viacom, speaks at the WSJTECH Live Conference held in Laguna Beach, California, USA on October 21, 2019.
Mike Blake | Reuters
David Ellison’s Skydance Media and its financial backers are considering a deal that would make all content private. paramount globala person familiar with the matter told CNBC.
Mr. Ellison’s film and television studio Skydance has exchanged preliminary information with Paramount, the people said, asking not to be identified because the deal negotiations are private. Full due diligence has not yet begun, the people said.
Skydance is working with private equity firm Redbird Capital Partners. KKR&Co. The company has agreed to a deal to acquire National Amusements, a holding company owned by Shari Redstone. It controls 77% of Paramount’s voting stock.
However, the deal is contingent on Skydance and Paramount merging, and the structure of the merger would likely result in the large media company being taken completely private, the people said.
Redstone is considering a sale as the media landscape shifts from traditional television to streaming. Paramount Global has operated a profitable business for decades, but now has a larger balance sheet to offer to Netflix, Google’s YouTube, Apple, Amazon and other sports and entertainment content providers. The scale is small compared to the major streamers.
A takeover is not certain, and negotiations may break down.
It is unclear whether Redstone will command a different premium for the National Amusements sale than what Paramount Global’s remaining shareholders will receive.
Skydance will need additional capital to acquire Paramount, which has a market capitalization of $8.2 billion and approximately $15 billion in debt. Some of that funding could come from Skydance’s private equity partners and billionaire co-founder Larry Ellison. oracle and David Ellison’s father. Skydance has not yet decided whether to move forward with the deal and has not yet reached out to raise any outside financing, according to people familiar with the matter.
Skydance is not interested in a deal that would only buy National Amusements, but not all of Paramount, the people said. Such a deal would give Skydance control of Paramount, but it would not solve Paramount’s problems as a publicly traded company. Those issues include running the growing but loss-making Paramount+ streaming service and declining linear cable properties such as MTV, VH1 and Comedy. Central and Nickelodeon.
Spokespeople for Redbird, Skydance, Paramount Global and National Amusement declined to comment.
warner bros discovery According to people familiar with the matter, the company is also in advanced discussions about acquiring Paramount Global. If Redstone were to sell to Skydance, one motive would be her concern that Warner Bros. Discovery would prefer a merger with Skydance. comcastOne NBCUniversal official said:
Mr. Pack first reported that Skydance was interested in acquiring National Amusement. The Wall Street Journal reported last week that Skydance is interested in a two-part deal that would involve a merger of Skydance and National Amusement. Bloomberg first reported on the exchange of company information.
Disclosure: Comcast NBCUniversal is the parent company of CNBC.
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