Skydance and Paramount Global form New Paramount in $28B deal

Skydance Media and Paramount Global have announced a definitive agreement to form "New Paramount," a next-generation media and technology leader through a two-step transaction. This includes the acquisition of National Amusements, Inc. and subsequently a merger of Skydance and Paramount Global. The transaction values New Paramount at an enterprise value of approximately $28 billion.

Under the terms of the agreement, Skydance will merge with Paramount in a transaction valuing New Paramount at an enterprise value of approximately $28 billion. The transaction will see Skydance investor group, led by the Ellison family and Redbird Capital Partners, investing up to $6 billion. This will include offering class A stockholders an election to receive in the merger $23 cash per share or 1.5333 shares of class B stock of New Paramount, and offering class B stockholders $15 cash per share or one share of class B stock of New Paramount.

The per share cash election amount to be offered to Paramount’s stockholders represents a 48% premium to the price of the class B stock as of July 1, 2024, and a 28% premium to the class A stock on the same date. The transaction is anticipated to close in the first half of 2025.

David Ellison will become chairman and chief executive officer, and Jeff Shell, chairman of Redbird Sports & Media and former CEO of NBCUniversal, will be president. The transaction will strengthen Paramount and enhance its balance sheet flexibility, allowing the company to invest in new initiatives and deliver greater cash flow growth.

The definitive transaction agreement includes a 45-day go-shop period during which the special committee of Paramount’s board of directors will be permitted to actively solicit and evaluate alternative acquisition proposals. Skydance and Paramount will host a call to discuss the transaction with securities analysts on July 8, 2024, at 8:30 a.m. ET. Today the company's shares have moved -5.3% to a price of $11.18. Check out the company's full 8-K submission here.

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