Paramount shares fall 7% as takeover saga finally appears to be coming to an end
Paramount stock (PARA) fell over 7% on Tuesday after the company announced the official end of its “go-shop” period and billionaire Edgar Bronfman Jr. dropped out of the race to buy Paramount late Monday.
Paramount’s announcement all but confirms that Skydance Media will be the company’s next owner, ending years of speculation surrounding the media giant controlled by Shari Redstone through her family’s holding company, National Amusements (NAI).
“After nearly eight months of thoroughly reviewing viable opportunities for Paramount, our special committee continues to believe that the transaction we have agreed to with Skydance offers immediate value and the potential for continued participation in value creation in a rapidly evolving industry landscape,” said Charles Phillips, chairman of Paramount’s special committee, in a statement.
Bronfman, heir to the Seagram liquor fortune and current chairman of FuboTV (FUBO), made a last-minute bid earlier this month when the company’s planned $6 billion takeover of National Amusements threatened to wipe out the roughly $8 billion deal it had signed with Skydance just a month earlier.
According to multiple reports, Bronfman had difficulty securing financing for the deal, which involved investors such as Fortress and BC Partners Credit. These difficulties led Bronfman to withdraw early from the bidding process.
“We continue to believe that Paramount Global is an exceptional company with an unparalleled collection of outstanding brands, assets and people,” Bronfman said in a statement.
The Skydance transaction is expected to close in the first half of 2025, subject to regulatory approval.
Earlier this month, Paramount reported a larger decline in its linear TV business than analysts expected as the company took a nearly $6 billion writedown on its cable unit.
At the same time, the media giant announced plans to lay off 15% of its US workforce, after already cutting around 800 jobs in February. The layoffs are expected to be completed by the end of the year.
Skydance, which is valued at $4.75 billion after the all-stock transaction, said it would inject $6 billion in cash into Paramount, with $1.5 billion going directly to the company’s debt-ridden balance sheet.
Skydance CEO David Ellison will become chairman and CEO of the combined company, while former NBCUniversal executive Jeff Shell, who was fired last year because NBC parent company Comcast (CMCSA) had an “inappropriate relationship” with an employee, will become president.
Last month, the new leadership team outlined its strategic vision for Paramount, which calls for $2 billion in cost reductions, of which $500 million has already been implemented.
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and send her an email at [email protected].
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