David Ellison’s Skydance has reached a preliminary deal with Shari Redstone’s National Amusements to merge with Paramount, according to two people familiar with the matter, resurrecting a deal which failed just weeks earlier.
Controlling shareholder National Amusements has referred the deal to the Paramount special committee, according to people familiar with the matter. Paramount’s special committee is currently reviewing and voting on the deal, according to a person familiar with the matter. A spokesperson for Paramount declined to comment.
Paramount shares surged as much as 9% on the news.
The resurrected deal will see Redstone receive a reduced consideration of $1.75 billion, according to a person familiar with the matter. The other financial terms of the deal, which CNBC previously reported, will remain unchanged: Skydance will acquire roughly half of Paramount’s controlling shares at $15 per share, for $4.5 billion, and contribute $1.5 billion towards Paramount’s balance sheet.
Redstone killed the initial bid in June as it was near the finish line. One of Redstone’s reasons was feeling as though Skydance had retraded the deal by asking her to take hundreds of millions of dollars less than the previously agreed to payment, according to one of the people.
The winding deal process had already led to the departure of CEO Bob Bakish earlier this year, leaving in place a three-headed office of the CEO to run the company. Other interested bids included a joint effort from private equity firm Apollo and Sony, as well as a recent entreaty from Barry Diller, chairman of media conglomerate IAC as well as a former Paramount executive.
The preliminary agreement was first reported by The New York Times and the Wall Street Journal.