Paramount deal wrapped up by Skydance (finally)

Paramount Global (NASDAQ:PARA) stock responded positively after the media conglomerate (finally) agreed to merge with Skydance Media, in a deal valued at $28 billion.

Skydance’s investor group, comprising David Ellison and Redbird Capital Partners, will acquire Paramount shareholder National Amusements for $2.4 billion, and spend $4.5 billion in a cash and stock deal to acquire Paramount’s publicly traded Class A shares and Class B shares.

It also committed to invest $1.5 billion of primary capital into the media group’s balance sheet.

After the transactions, Skydance will own 100% of Paramount’s Class A shares and 69% of its Class B shares.

The transaction price ($23 per A share and $15 per B share) represents a 48% premium for B share holders, and a 28% premium for A share holders.

It will see the control of the company move transition from Shari Redstone who, via National Amusements, owned 80% of Paramount’s voting rights. The transaction will mark the end of the Redstone family’s control of the group, built by its late patriarch, Sumner Redstone.

Ellison, a successful Hollywood producer, will run ‘new Paramount’ as chief executive and chair, supported by former NBCUniversal chief executive Jeff Shell, who will be company president.

“This is a defining and transformative time for our industry and the storytellers, content creators and financial stakeholders who are invested in the Paramount legacy and the longevity of the entertainment economy,” Ellison said in a statement.

“I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount.

“We are committed to energizing the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come.”

Shari Redstone, meanwhile, added: “In 1987, my father, Sumner Redstone, acquired Viacom and began assembling and growing the businesses today known as Paramount Global.

“He had a vision that ‘content was king’ and was always committed to delivering great content for all audiences around the world.

“That vision has remained at the core of Paramount’s success and our accomplishments are a direct result of the incredibly talented, creative, and dedicated individuals who work at the company.

“Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king. Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment.”

RedBird Capital Partners is a New York headquartered investment group led by Jeff Zucker which has interests in AC Milan, the Alpine F1 Team and Liverpool FC owner Fenway Sports Group.

In New York, Paramount stock was down 28 cents or 2.37% trading at $11.53.