Skydance & Paramount Exclusive Negotiating Window Ends In Hours – Will David Ellison Walk?

The clock is ticking down to midnight, the end of a month-long exclusive negotiating window between Paramount Global and Skydance Media. The David Ellison company has been circling Paramount for months and lobbed several offers to buy out Shari Redstone‘s controlling stake, backed by Oracle co-founder Larry Ellison and Gerry Cardinale’s RedBird Capital.

The Skydance team spent the past month taking a close look at the books. In the face of clamorous objections from other Paramount shareholders on the initial deal structure, it sweetened the pot for owners of the common stock. The revised offer is said to be Skydance’s best and last (although it still got a thumbs down from other investors).

The timing was tight to clinch a deal in a month but there had been talk talk of a possible extension. It’s not clear if that’s happening now, may be unlikely, because Paramount now has another offer on the table from a team of Sony Pictures Entertainment and private equity giant Apollo. After waiting a bit, the partners formally asked to discuss a cash deal potentially worth $26 billion. They still need to do their own due diligence.

Paramount had set up a special board committee to explore offers. It can receive and acknowledge another offer during an exclusive window, but it cannot engage with the other party. So Skydance would need to cool its heels for a bit while Paramount examined the other offer. The question is will it wait, or bail?

Meanwhile, the leadership of Paramount Global changed abruptly earlier this week. Chief executive Bob Bakish left and was replaced by three top division heads in a new office of CEO. The company also declined to take questions on its quarterly earnings call, a rare occurrence and the latest twist in an unpredictable ride at Paramount this year.

A deal with Sony would mean taking Paramount private in a merger of two big studios, not a popular prospect in Hollywood since it means one less place to shop projects. It would also likely split the company up since Sony of Japan can’t own U.S. broadcast assets. Skydance would keep it public, with a cash infusion and a restructuring.