Redstone ends merger talks with Skydance Media

(Bloomberg) — Paramount Global Chairman Shari Redstone backed away from a bid to merge her family’s media company with David Ellison’s Skydance Media, ending months of tense negotiations that would have ended the The Redstones’ decades-long run at the top of ownership of CBS and MTV.

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A special board committee met Tuesday to discuss a complex deal proposed by Ellison that would have seen Redstone sell him National Amusements Inc., the family company that controls 77% of Paramount’s voting stock . But before the meeting ended, Redstone representatives informed the committee that NAI had not reached an agreement with Skydance, a dramatic turnaround given Redstone’s initial support.

Redstone had pushed for Paramount’s merger with Skydance over other potential deals, pursuing a transaction she believed would be in the best interest of her family and the company’s legacy. But she changed her mind after resistance from company management and shareholders prompted Ellison to revise its offer.

Ellison changed the terms in an effort to appease everyone – not only the Redstones, but also Paramount shareholders who balked at a deal that paid the Redstones a premium and diluted other investors. Ellison injected more money for shareholders and cash to pay down debt, and also offered to help cover possible legal costs. Redstone was sued following the Viacom-CBS merger and feared being sued again over the Ellison deal.

Redstone will now pursue the sale of National Amusements on its own, rather than attempting to merge Paramount with another company, people familiar with the discussions said, asking not to be identified discussing nonpublic information.

“NAI is grateful to Skydance for its months of work in pursuing this potential transaction and looks forward to the continued successful production collaboration between Paramount and Skydance,” National Amusements said in a statement.

The Wall Street Journal earlier reported the end of the discussions.

Paramount shares fell about 8% following the news, ending the day at $11.04, as investors prepared for another period of trading and uncertainty. Although shareholders initially resisted Ellison’s deal, they proved receptive to its revised terms.

Ellison, the son of Oracle Corp. co-founder Larry Ellison, has been pursuing Paramount for months, sensing a rare opportunity to own one of Hollywood’s oldest studios. Founded in 1912, Paramount Pictures is the publishing house of The Godfather, Star Trek and Forrest Gump. It has been controlled for three decades by the Redstone family and National Amusements. But the shares have lost more than half their value since the Redstones consolidated CBS Corp. and Viacom Inc. in 2019 to create Paramount Global.

The Redstones are considering a sale as the business faces significant challenges. Loaded with more than $14 billion in debt, the company struggled to compete in streaming and suffered…

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