Yahoo Finance Paramount Stock Falls on Report Sony Is ‘Rethinking’ $26 Billion Bid
Shares of Paramount Global slid Tuesday following a CNBC report that Sony was “rethinking” its bid to acquire Paramount in conjunction with private-equity firm Apollo Global Management.
Earlier this month, Sony Pictures Entertainment and Apollo sent a nonbinding offer to Paramount Global’s board offering to take Paramount private for $26 billion in cash, a price tag that would include the assumption of debt. Paramount Global’s stock dropped more than 5% after CNBC’s David Faber reported Tuesday that “the likelihood of a bid [by Sony and Apollo] at least for the full company seems to be fading a bit.”
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“There has not been an NDA signed by Sony [with Paramount Global] at this point, a nondisclosure agreement that you would typically sign so you can begin real due diligence,” Faber said Tuesday on CNBC’s “Power Lunch.”
Sony Group’s stock price dropped last week and “that may have given them some pause, not to mention, of course, what is there’s the continued deterioration of the environment we know so well, namely the cable ecosystem, all of which has led to what I am told is at least quote ‘a rethinking’ of the Paramount bid,” Faber said. “That does not mean that there would not be some sort of bid potentially forthcoming, but will it be restructured?”
Sony and Apollo emerged as tag-team bidders as Paramount Global board’s special committee established to consider M&A proposals was evaluating an offer from Skydance Media (in a bid backed by RedBird Capital Partners and KKR) to merge Paramount and Skydance while keeping Paramount Global public. Under that proposal, Skydance would have acquired Shari Redstone’s National Amusements Inc., which is the controlling shareholder of Paramount Global. But the Paramount board’s committee let the exclusive negotiating window with Skydance lapse without going forward on that offer.
Sony may be revising its approach to possibly “take control of a NAI and therefore exert control over the combined company in that way,” Faber suggested. He added that the Skydance-RedBird team has “continued to do their work. And so perhaps if you’re handicapping it at this point, given at least this latest development regarding Sony and Apollo, perhaps the Ellison Skydance bid once again may come to the fore.”
Reps for Sony Pictures and Apollo did not respond to a request for comment.
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