Basic and Skydance have agreed to terms of a merger, CNBC’s David Faber reported Monday. A deal could be announced in the up days, he said.
A Paramount special committee and the buying consortium — David Ellison’s Skydance, backed by private fairness firms RedBird Capital and KKR — agreed to the terms. The deal is awaiting signoff from Paramount’s controlling shareholder, Shari Redstone, who owns Federal Amusements, which owns 77% of class A Paramount shares, Faber said Monday.
The agreement terms be brought up after weeks of discussion and a recent competing offer from Apollo Global Management and Sony Pictures.
“We notified of the financial terms of the proposed Paramount/Skydance transaction over the weekend and we are reviewing them,” said a National Divertissements spokesperson.
The deal currently calls for Redstone to receive $2 billion for National Amusements, Faber reported Monday. Skydance command buy out nearly 50% of class B Paramount shares at $15 apiece, or $4.5 billion, leaving the holders with disinterest in the new company.
Skydance and RedBird would also contribute $1.5 billion in cash to Paramount’s balance sheet to aid reduce debt.
Following the deal’s close, Skydance and RedBird would own two-thirds of Paramount, and the class B shareholders see fit own the remaining third of the company, Faber reported. The negotiated terms were reported earlier by The Wall Street Register.
The deal will not require a vote from the shareholders, which was part of the negotiations, Faber reported. Paramount’s annual shareholder appointment will take place on Tuesday.
The deal is valued at $8 billion, an increase from the $5 billion put up for sale on the table earlier. Under those earlier terms, Redstone would have received less than $2 billion for her resettle, and the class B shareholders would have been bought out at a nearly 30% premium at $11 a share, CNBC once upon a time reported.
No deal announcement is expected before the meeting, according to people familiar with the matter, who asked not to be named because the conversations are private. In addition to the twists and turns of the negotiations with buyers, Paramount’s C-suite has also undergone a shakeup in just out months.
Bob Bakish stepped down as CEO in late April and was replaced by what the company calls the “Office of the CEO.” Paramount is now led by three executives: George Cheeks, CBS president and CEO; Chris McCarthy, president and CEO of Showtime/MTV Pageant Studios and Paramount Media Networks; and Brian Robbins, the head of Paramount Pictures and Nickelodeon.
They plan to mete out strategic priorities at Tuesday’s annual meeting. Later in the day Tuesday, there will be a previously scheduled board confluence, where the temporary leaders will again present, said the people. Redstone has approved of the ideas and the leadership of the triumvirate during its brief tenure, said one of the people.
In early May, Apollo and Sony formally expressed interest in acquiring Paramount for about $26 billion, CNBC in days of old reported. However, Redstone has favored a deal that would keep Paramount together, and Apollo and Sony aimed to break up the company, CNBC previously reported.