How will Paramount buy Skydance?
Paramount may need to raise billions to close the merger deal with Skydance Media, the movie studio behind Top Gun: Maverick. Full details
Paramount has slipped on Wall Street in the wake of a merger with Skydance that could require billions.
Paramount Global shares lost 9% on April 4 after CNBC reported that the company would need to issue new shares to raise up to $3 billion in the event of a merger with Skydance Media, the film behind Top Gun: Maverick, by David Ellison. The day before, news broke that the two companies are in exclusive merger negotiations. The Wall Street Journal then reported that Apollo Global Management had made an all-cash offer of $26 billion for Paramount, which was rejected.
Upon news of the negotiations with Skydance, the stock closed on the stock market with a gain of 15%. Paramount's capitalization fell below $10 billion in January and its net debt is about $13 billion.
According to CNBC , even without the Ellison deal, Paramount may need a capital increase. Warner Bros. Discovery abandoned talks to potentially acquire Paramount Global in February after months of negotiations. A mega-merger between the two entertainment giants would have created one of the largest media companies in the world.
All the details.
APOLLO'S OFFER REJECTED
In late March, private equity firm Apollo Global Management offered to buy Paramount's film and TV studios for $11 billion, according to a Wall Street Journal report. The fund therefore offers more than Paramount Global's $7.7 billion market capitalization.
Paramount's studio division has long been targeted for purchase, with video streaming leader Netflix among the companies that have expressed interest in the deal, the Journal report adds. Additionally, the offer came as an independent committee of the company's board was reviewing another bid by Skydance Media to merge with all of Paramount.
After that, media reports this week said Apollo Global Management told Paramount over the weekend that it was interested in acquiring the entire company for more than $26 billion, including the value of Paramount's debt.
EXCLUSIVE NEGOTIATIONS BETWEEN PARAMOUNT AND SKYDANCE
But Paramount has decided to reject Apollo's offer and proceed with ongoing negotiations with Skydance, which became exclusive this week.
THE COLLAPSE ON THE STOCK MARKET
Shares of Paramount Global fell nearly 9% in afternoon trading Thursday, following a CNBC report that a potential merger with entertainment company Skydance Media would mean raising billions in new cash.
Specifically, the company would need to raise up to $3 billion in new equity if it were to merge with Skydance, according to sources familiar with the deal.
THE SCENERY
Finally, according to Reuters , a blockbuster deal between Skydance and Paramount would mark further consolidation in the media industry, where traditional TV businesses have declined as audiences gravitate toward streaming services. The industry is also grappling with the impact of last year 's Hollywood strikes and a weak advertising market. Without forgetting that Paramount Global has lost more than $16 billion in value since its inception with the merger of CBS and Viacom in 2019.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/paramount-come-comprera-skydance/ on Sun, 07 Apr 2024 15:10:49 +0000.