Paramount to merge with Skydance Media in complex deal

investmentnews.com:

Paramount Global agreed to merge with Skydance Media in a deal that hands control of the storied Hollywood studio to producer David Ellison, ending one of the industry’s most dramatic acquisitions.

As part of the complicated deal months in the making, Paramount Chair Shari Redstone agreed to sell her family’s National Amusements Inc., which controls about 77% of the voting stock in Paramount, for $2.4 billion, according to a statement released by the company Sunday.

The accord marks an abrupt turnaround after talks between Redstone and Ellison, the son of Oracle Corp. co-founder Larry Ellison, collapsed last month. Redstone’s decision at the time to end discussions shocked the board and frustrated employees and investors, sending the stock tumbling. 

Shari Redstone, chair of Paramount Global, has been seeking the best deal to protect her family legacy.

The Ellison family and RedBird Capital Partners have agreed to invest more than $8 billion in the business. That includes $1.5 billion to help pay down Paramount’s debt and $4.5 billion to buy Paramount shares.

Paramount shares rose as much as 7.2% in premarket trading on Monday before New York exchanges opened. The stock had closed 3.1% higher at $11.81 on Friday. 

New owners and additional capital could provide a fresh start to beleaguered Paramount, the parent of CBS and MTV. Laden with more than $14 billion in debt, the iconic Hollywood company has struggled to compete in streaming and has suffered as cable TV audiences canceled their subscriptions and abandoned traditional channels like CBS and Nickelodeon. The company had a net loss of $554 million, or 87 cents a share, in the first quarter.

“Given the changes in the industry, we want to fortify Paramount for the