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Shari Redstone has ended talks with Skydance Media over a deal that may have handed management of leisure empire Paramount from her household to billionaire scion David Ellison.
The choice closes the books on talks with Ellison’s Skydance which have dragged on for months and left the way forward for Paramount hanging within the steadiness.
Skydance had supplied about $2bn to accumulate Redstone’s Nationwide Amusements (NAI), after which deliberate to merge Paramount into Ellison’s firm by a inventory deal.
Skydance had supplied to purchase out about half of Paramount’s frequent shareholders at $15 a share, whereas additionally injecting about $1.5bn to assist repay the corporate’s debt.
NAI on Tuesday mentioned the teams “haven’t been in a position to attain mutually acceptable phrases” and that it “is grateful to Skydance for his or her months of labor in pursuing this potential transaction”.
A Skydance consultant declined to remark. Shares in Paramount closed down 8 per cent at $11.04 on the information, which was first reported by The Wall Road Journal.
Redstone’s determination got here as a shock to Ellison’s camp, which included personal fairness backers RedBird and KKR, as the 2 sides appeared near a deal in latest weeks.
Paramount’s particular committee, which was in control of representing the pursuits of all the media firm’s shareholders, together with these with out voting rights, supported the bid in a non-binding endorsement earlier this month, mentioned individuals briefed concerning the matter.
Redstone modified her thoughts in latest days, partly as a result of Skydance lowered the amount of money that may have gone to holding firm NAI because it elevated the payout to different shareholders, mentioned a individuals briefed on the matter.
Folks near the talks mentioned they had been surprised by her determination to tug the plug. These individuals added the Ellison consortium had agreed to “just about” all the things NAI and Paramount had requested for over a number of months of negotiations.
The board’s particular committee met on Tuesday to debate the Skydance proposal, solely to learn by an NAI consultant that there was no deal. The particular person added that there was no expectation of “a path ahead on this transaction”, in response to a press release from the administrators on the committee.
Redstone is now weighing potential affords from different suitors.
Billionaire Edgar Bronfman Jr, the inheritor of the Seagram drinks enterprise, has signalled his curiosity in buying NAI for greater than $2bn, in response to two individuals aware of the matter. His bid is backed by personal fairness group Bain. However that group would require weeks to finish due diligence earlier than making a proper supply, these individuals cautioned.
Redstone has additionally obtained curiosity from movie producer Steven Paul, one particular person mentioned.
Nevertheless, one particular person concerned within the discussions mentioned there was no actual various to Skydance’s in the mean time.
NAI controls about 80 per cent of Paramount’s voting rights regardless of solely proudly owning about 10 per cent of the corporate’s shares. Whoever buys NAI may technically management Paramount with out having to purchase all the firm, though non-voting shareholders may problem such a transfer within the courts.