Skydance Media CEO David Ellison is exploring an all-cash bid to acquire entertainment giant Paramount Global's parent National Amusements, a person familiar with the matter said on Wednesday (Jan. 10).
Ellison could take control of National Amusements with financing from Skydance's existing investors, which include The Ellison family, RedBird Capital Partners and Tencent, the source said, confirming a report in the Wall Street Journal.
If successful, Ellison would pursue a second step to merge Paramount Global with Skydance, the company behind such films as Top Gun: Maverick and Mission: Impossible -- Dead Reckoning Part One.
Talks are in early stages and may not result in a deal, the source cautioned.
Paramount frequently receives expressions of interest in acquiring Paramount Pictures, the storied studio whose library includes such classics as Star Trek, The Godfather and Indiana Jones, sources have previously told Reuters.
Shari Redstone, whose family controls Paramount, has been reluctant to part with one of Hollywood's most prestigious studios.
However, the deterioration of the global entertainment business has wiped out more than $16 billion in value from the media company formed through the hard-fought reunion of CBS and Viacom in 2019.
The company’s market capitalization was $9.4 billion on Thursday-- less than the valuation of Viacom before the merger.
People close to Redstone say she believes the company as “grossly undervalued,” and would consider a deal that “makes sense.”
In December, it was reported that Warner Bros Discovery CEO David Zaslav and Paramount CEO Bob Bakish had met to discuss a potential deal.
National Amusements directly or indirectly owns 77% of the voting shares of Paramount. National Amusements also controls CBS, cable networks Nickelodeon, MTV and Comedy Central, streaming service Paramount+, and also owns 800 film screens in the U.S.
Paramount could be worth $38.8 billion and equity could be worth about $38 per share if the firm's networks, production assets and DTC business were sold individually, Citi had estimated on Dec. 11 after news reports on sale interests.
National Amusements and Larry Ellison did not immediately respond to Reuters requests for comment, while Paramount declined comment.
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Originally published: January 11, 2024.
H/T: Special thanks to RegularCapital!
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