Top Of The Mountain: David Ellison’s Skydance Taking Over Paramount In $8 Billion Deal

David Ellison‘s Skydance Media has announced an $8 billion deal to take over Paramount Global, capping a seven-month quest.

The company had received approval earlier Sunday from a special committee of Paramount’s board of directors. The full board then OK’d the plan for a two-step transaction, first the acquisition of National Amusements Inc., the entity run by Shari Redstone that controls almost 80% of Paramount voting shares. That transaction will be followed by a full merger.

Paramount Class A stockholders will get $23 per share in cash/stock election. Class B stockholders will get $15 per share in cash/stock election. The cash consideration available to public shareholders totals $4.5 billion.

Ellison will be Chairman and CEO, and former NBCUniversal chief Jeff Shell will lead the company as president.

In a press release, Skydance said it will “reposition Paramount to improve profitability, foster stability and independence for creators, and enable more investment in faster growing digital platforms.”

The all-stock transaction values Skydance at $4.75 billion. Skydance equity holders will receive 317 million Class B Shares valued at $15 per share.

Skydance Investor Group, comprised of the Ellison family and RedBird Capital Partners, will invest $2.4 billion to acquire National Amusements for cash. It will then $4.5 billion for the stock/cash merger consideration to be paid for publicly traded Class A shares and Class B shares, as well as $1.5 billion of primary capital to be added to Paramount’s balance sheet.

After the close of the deal, Skydance Investor Group will own 100% of “New Paramount” Class A shares and 69% of outstanding Class B shares, or about 70% of the pro forma shares outstanding.

The per share cash election amount to be offered to Paramount’s stockholders represents a 48% premium to the price of the Class B stock as of July 1, 2024, and a 28% premium to the Class A stock on the same date.