National Amusements halts negotiations with Skydance over Paramount acquisition

National Amusements has halted discussions with Skydance regarding a proposed merger with Paramount Global, as reported by CNBC’s David Faber on Tuesday. This decision comes after National Amusements, owned by Shari Redstone, had previously agreed to merger terms with Skydance, RedBird Capital, and KKR, pending approval from Redstone. The news of the halted talks caused Paramount shares to drop nearly 8% on Tuesday.

In a statement released on Tuesday, National Amusements expressed that they were unable to reach mutually acceptable terms with Skydance for the potential transaction. Despite this, they expressed gratitude towards Skydance for their efforts and emphasized their support for Paramount’s current strategic plan and ongoing collaboration with Skydance.

The Wall Street Journal had reported earlier that talks between National Amusements and Skydance had ceased due to disagreements on certain terms of the deal. The Special Committee of Paramount Global’s Board of Directors also confirmed that negotiations with Skydance did not result in an agreement.

The decision to stop discussions with Skydance comes after Paramount’s annual shareholder meeting, where the company’s leadership outlined strategic priorities for the future. Paramount’s current leadership, known as the “Office of the CEO,” presented a plan that included exploring joint venture opportunities, reducing costs, and divesting noncore assets.

Shari Redstone, who controls the fate of Paramount, previously considered a $26 billion acquisition offer from Apollo Global Management and Sony. However, she preferred a deal that would keep the company intact, leading to the potential merger with Skydance. Under the proposed terms with Skydance, Redstone would have received $2 billion for National Amusements, with Skydance acquiring nearly 50% of class B Paramount shares.

The deal with Skydance would have valued Paramount at $8 billion, helping to reduce the company’s substantial debt. Paramount’s leaders have emphasized the importance of restoring the company’s financial health by reducing debt and achieving an investment-grade rating.

Overall, the decision to end discussions with Skydance marks a significant development in the future of Paramount Global, highlighting the complexities of corporate negotiations and strategic decision-making in the entertainment industry.

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