Shocked, is what insiders are saying.
Shari Redstone, an heiress with significant influence over her family’s media empire, Paramount Global, has recently made headlines by abruptly terminating negotiations with David Ellison’s Skydance Media. This decision came as a shock to the industry, particularly because it occurred just as the deal seemed on the verge of approval.
“My sources just told me she lost trust in him,” says @WSJ‘s @jtoonkel on a reason why Shari Redstone ended talks with David Ellison’s Skydance on the Paramount deal. “This is one of the most complicated deals I have ever covered.” $PARA pic.twitter.com/jpyk3eeRnC
— Last Call (@LastCallCNBC) June 11, 2024
The proposed merger, which had been under discussion for over six months amid complex and “grueling” negotiations, was about to be voted on by Paramount’s special committee when Redsole, representing National Amusements Inc.—the Redstone family holding company—halted the proceedings. This move has left the industry buzzing with speculation regarding her motivations and the future of Paramount Global.
Several theories have been proposed about why the deal fell through. Some suggest Redstone had concerns over the latest financial terms of the deal or feared potential shareholder litigation. Others believe issues of legacy and control over the company her father, Sumner Redstone, built influenced her decision. A significant sticking point in the negotiations was whether the merger required approval from a majority of minority shareholders, a condition Redstone reportedly insisted on to mitigate potential legal challenges, but which Skydance resisted.
Paramount Global Chair Shari Redstone has decided to end negotiations for a merger between the legendary media company and David Ellison’s Skydance Media, according to people familiar with the matter.
Hannah Miller has more https://t.co/BSaiOwITbg pic.twitter.com/C3Hh7bvOzP
— Bloomberg TV (@BloombergTV) June 11, 2024
On the other hand, sources close to Skydance believe the company made a fair and financially sound offer. They suggest that Redstone, possibly influenced by an advisor who is a known competitor to Ellison, withdrew due to apprehensions about finalizing the deal—a narrative summed up by one insider’s blunt statement that “Shari got spooked.”
The fallout from these failed negotiations includes high-profile corporate shake-ups at Paramount Global, including the departure of CEO Bob Bakish and four board directors. The ongoing corporate drama resembles a plot from the TV series “Succession,” highlighting the intense internal conflicts and strategic maneuvering within the company.
In response to the collapsed deal, National Amusements expressed support for Paramount’s interim leadership team, which is currently exploring new strategies for the company. These strategies include potentially launching a joint streaming venture, finding operational synergies, and implementing a significant cost reduction plan. Despite the failed merger, National Amusements remains optimistic about Paramount’s ongoing collaboration with Skydance on successful projects like the films “Top Gun” and “Mission Impossible.”
After more than six months of on-again-off-again talks, Shari Redstone has ended negotiations with David Ellison’s Skydance Media about a prospective merger with Paramount Global.
“National Amusements, Inc., the majority voting shareholder of Paramount Global, today announced… pic.twitter.com/khIUTsfkxj
— Variety (@Variety) June 11, 2024
Major Points:
- Shari Redstone abruptly terminated negotiations with David Ellison’s Skydance Media, halting a merger that was close to completion after over six months of intense discussions.
- The collapse of the talks occurred just as Paramount’s special committee was poised to vote, spurred by concerns that may include financial terms and potential shareholder litigation.
- Redstone’s decision reflects underlying issues such as legacy preservation and control over the media empire founded by her father, Sumner Redstone.
- The fallout has led to significant corporate upheaval within Paramount Global, including the ousting of CEO Bob Bakish and the resignation of four board directors.
- National Amusements Inc., the Redstone family holding company, has expressed support for Paramount’s interim management and their strategic plans, which include a possible joint streaming venture and substantial cost reductions.
Susan Guglielmo – Reprinted with permission of Whatfinger News
