The craziest merger saga in recent memory this side of “Succession” just had a big third-act twist. A new bidder has emerged to buy Paramount Global and controlling company National Amusements, Inc. during the 45-day “go-shop” window following an agreement to merge Paramount with Skydance. The new offer may be too rich to pass up. (Then again, they said that about Byron Allen’s.)
Apex Capital Trust, a conglomerate of financial institutions and financial-services providers, has submitted a massive bid to buy up all of Paramount Global and National Amusements (NAI) stock in an all-cash deal. Their offer: up to $43 billion. In cash.
We’ll give you a moment to wipe up the coffee you probably just spat out.
Apex would agree to take on all of Paramount’s debt — $15.8 billion worth — and it would even pay the $400 million fee to Skydance for breaking their deal. Apex would then infuse $10 billion into Paramount in capital to execute on its business plan. The bid was formally submitted on July 12. Reuters first reported the news.
“We are confident in the expertise of the investment firm and their willingness to move expeditiously and efficiently to evaluate this offer and submit it to the Special Committee of the Board of Paramount as a proposal that is substantially superior to the Skydance deal,” Tatiana Logan, general counsel for Apex Trust, said in a press statement. “Paramount and its assets are a national treasure, and we intend to treat them accordingly. Paramount’s global future is bright, but it requires resources, which we have and are enthusiastic to deploy, making it a win-win situation for all of Paramount’s stakeholders.”
Paramount did not respond to IndieWire’s request for comment; nor did a spokesperson for the company’s special-advisory committee, which has been reviewing this whole process. When reached, NAI had no comment.
David Ellison and Skydance’s agreed-upon deal with Paramount has Ellison paying $8 billion in equity. He’ll buy National Amusements, take control of Paramount, and then merge it with his own company. Only $1.5 billion of that money is going to pay down Paramount’s debt.
National Amusements controlling shareholder Shari Redstone picked Ellison (after a lot of back and forth) over other all-cash deals to buy Paramount Global. The most notable of those was a $26 billion bid from private equity firm Apollo and Sony Pictures, which would have seen the Paramount studio and other valuable parts absorbed into Sony. The rest would have been sold for parts.
We did the math: $43 billion, by comparison, is…a lot more money: for shareholders, for Shari, and for the company to play on as-is. Paramount’s special advisory committee has a fiduciary duty to its shareholders to seriously consider the deal.
While it is currently unclear what Apex’s plan would be for Paramount, it almost certainly would result in the selling off of assets that are not, as Logan put it, national treasures. Redstone has been concerned both with money, but also wants to preserve legacy of the company — particularly its movie studio.
Since the Skydance-Paramount deal was finalized on July 8, both Sony/Apollo and Barry Diller, the former head of Paramount, said they would not be exploring a bid during the “go-shop” period. Edgar Bronfman Jr., the heir to the Seagram’s fortune, was reportedly still exploring a bid. Diller walked away, in part, because he said it felt like Ellison and his father — Oracle founder Larry Ellison — had an unlimited balance sheet to match or beat any offer out there. We’ll see how willing Larry is to open that checkbook now should Redstone weigh her newest option — again.
The go-shop period expires on August 21.
