Skydance Set to Acquire National Amusements and Merge with Paramount in Strategic Media Deal

Skydance Set to Acquire National Amusements and Merge with Paramount in Strategic Media Deal

It’s on… Ellison has his eye on Paramount.

Skydance Media, led by David Ellison, has entered into a preliminary agreement to acquire National Amusements Inc. and its subsidiary, Paramount, which owns major networks like CBS and MTV. This move comes after a previous round of talks had stalled last month but were recently revived, leading to a tentative deal now under review by a special committee of Paramount directors.

The potential merger has sparked significant market reaction, with Paramount’s share price jumping 13% as the news hit the market. The deal’s terms have been adjusted to offer National Amusements a higher valuation and additional legal safeguards to protect against possible litigation.

David Ellison, backed by investment entities such as RedBird Capital Partners and KKR & Co., has proposed a substantial financial package. The proposal involves purchasing National Amusements for $2.25 billion and infusing $1.5 billion into Paramount to help reduce its heavy debt burden, which currently exceeds $14 billion. Furthermore, Ellison’s consortium plans to invest an additional $4.5 billion to buy Paramount shares, providing considerable returns to various shareholder classes.

This strategic acquisition is expected to provide Paramount with a much-needed lifeline by injecting fresh capital into the company. This comes at a critical time as Paramount is grappling with the rapid changes in the media landscape, particularly the shift away from traditional media formats toward digital and streaming services.

In addition to this major deal, Paramount is involved in other significant business moves, including discussions to sell its Black Entertainment Television (BET) network. The potential sale, involving figures such as BET CEO Scott Mills and private equity firm CC Capital, could see the network fetching between $1.6 billion and $1.7 billion.

Key Points:

i. Skydance, led by David Ellison, is nearing a deal to acquire National Amusements Inc. and merge with its subsidiary Paramount, which owns networks like CBS and MTV.

ii. The preliminary agreement rekindles discussions following a breakdown in talks last month, with the transaction now under review by Paramount’s directors.

iii. Paramount’s shares surged by 13% following news of the potential merger, reflecting investor optimism about the deal’s financial implications.

iv. The proposed terms include a $2.25 billion purchase of National Amusements and a $1.5 billion investment in Paramount to help manage its substantial debt.

v. The deal is part of broader strategic moves by Paramount, which is also in talks to sell its Black Entertainment Television network for up to $1.7 billion.

Al Santana – Reprinted with permission of Whatfinger News

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