- Paramount shares gain
- Initial talks in June failed
- Committee considering new deal
Shares in Paramount Global (PARA:NASDAQ) gained 7% yesterday and added a further 3% to $19.32 in after-hours trading after the US media firm said it had resumed merger talks with Californian-based TV and film production company Skydance Media.
In June, talks between the two were called off after both parties failed to reach agreement on the terms of the deal.
WHAT DOES THE NEW DEAL MEAN?
The revived deal will see Paramount’s controlling shareholder National Amusements, led by Shari Ellin Redstone, who is president and non-executive chairwoman of Paramount Global, receive a reduced consideration of $1.75 billion.
Other financial terms of the deal will remain unchanged, meaning Skydance will buy roughly half of Paramount’s controlling shares at $15 per share, for $4.5 billion, and contribute $1.5 billion towards Paramount’s balance sheet, according to US news outlet CNBC.
Paramount’s special committee is currently reviewing and voting on the new deal.
Back in April this year, Paramount chief executive Bob Bakish stepped down when rumours of a potential bid were first revealed and was replaced by a three-person team to run the company.
Other interested bids included a joint effort from US private equity giant Apollo Global (APO:NYSE) and Japanese media and electronics group Sony (SONY:NYSE), as well as from Barry Diller, chairman of media conglomerate IAC (IAC:NASDAQ) and a former Paramount executive.
The preliminary agreement was first reported by US newspapers New York Times and the Wall Street Journal.
