While Paramount continues its discussions to merge with another media company, Skydance, a new interested party has emerged. And it’s not Warner, who abandoned the agreement months ago.
Sony Pictures Entertainment and Apollo Global Management, an investment firm, have been in talks to join forces in a joint bid to acquire Paramount, as explained in The New York Times.
The two companies have not yet made an official offer, as Paramount is still in exclusive talks with Skydance. But the potential deal with Skydance has generated a strong negative reaction among investors.
What would Apollo and Sony get from a supposed purchase of Paramount?
Apollo had already proposed to Paramount the purchase of the company for at least 26 billion dollars, including debt. But Paramount’s board of directors continued with their more advanced discussions with Skydance, due to doubts about Apollo’s financing.
A joint offer with Sony would almost certainly alleviate those concerns, adding operational expertise and additional capital to Apollo’s already significant arsenal.
Tony Vinciquerra, CEO of Sony Pictures Entertainment, has held discussions over the past week with Apollo about the possibility of presenting a joint offer, according to the people cited. The offer would consist of a cash purchase of Paramount’s shares, resulting in the privatization of the company through a joint venture.
The terms of the joint offer are still being negotiated. If Sony is successful in its bid, it is very likely to incorporate Paramount studio as a label within its own media empire, merging the studio’s marketing and distribution arm with its own.
It remains to be seen how CBS, one of Paramount’s crown jewels, would fit into the combined company alongside Paramount’s fading cable channels.
National Amusements, the company that controls Paramount, has already signed a potential agreement with Skydance. National Amusements is controlled by Shari Redstone, who has appointed a special committee of independent advisors to evaluate Skydance’s offer. Since Skydance’s proposal would give cash to Ms. Redstone and shares of Paramount shareholders in a new company, several investors have opposed it.
Unlike Skydance, Sony and Apollo would not attempt to buy National Amusements
The Skydance agreement for Paramount would bring expertise to Paramount, including technology and animation knowledge from Mr. Ellison’s management team, which includes John Lasseter, a former Pixar executive. The plan includes operational efficiencies and Skydance improving Paramount’s streaming capabilities.
The merger of Paramount and Sony would create a media giant that would bring together a collection of television channels and film studios under the same corporate umbrella. That is why there are many people paying close attention to this move, which could be one of the most important of recent decades.
