Skydance may back out of bid following Sony’s Apollo offer

Skydance Media’s Offer for Paramount Global Hangs in the Balance

Skydance Media, backed by private equity firms RedBird Capital and KKR, is facing a critical decision regarding its offer for Paramount Global. According to sources familiar with the matter, Skydance is prepared to walk away from its offer unless it receives a firm commitment from controlling shareholder Shari Redstone.

The looming deadline for discussions between Skydance and Paramount is fast approaching, with the exclusivity window set to end on Friday. Paramount’s shares have seen a boost following reports of Apollo Global Management and Sony Pictures expressing interest in acquiring the company for around $26 billion.

The consortium led by David Ellison’s Skydance has been eagerly awaiting feedback from Paramount’s special committee on the potential acquisition. Now, with competing offers on the table, the group is looking to Redstone for reassurance of her commitment to the deal.

Despite the pressure to make a decision, Skydance is wary of being used as a “stalking horse” offer for Apollo and Sony. However, there is a possibility of collaboration between Ellison and Redstone depending on her response to the latest developments.

As negotiations continue, the valuation of Skydance as part of the deal remains around $5 billion. The consortium’s revised offer includes a control premium for Redstone, with additional capital being allocated to pay Class B shareholders at a premium price.

Redstone’s preference for a deal that would keep Paramount intact aligns with Skydance’s proposal, as opposed to a potential breakup by a private equity firm. The outcome of these ongoing discussions will have significant implications for the future direction of Paramount Global.

In the midst of these developments, it remains to be seen whether Skydance’s offer will ultimately prevail or if Apollo and Sony’s bid will emerge as the preferred choice for Paramount’s stakeholders. The next steps in this high-stakes negotiation process will undoubtedly shape the landscape of the entertainment industry for years to come.

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