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Shari Redstone’s National Amusements has agreed to a preliminary deal to sell a controlling stake in Paramount Global (NASDAQ:P) to David Ellison’s Skydance Media, Reuters reported.
Skydance will pay $1.75 billion to buy National Amusements, the theater chain that owns the Redstone family’s 77 percent stake in Paramount, the news agency reported, citing people familiar with the matter. The companies also agreed to a 45-day “shopping” period during which other potential bidders for Paramount can submit their offers, the Wall Street Journal reported.
Under the terms of the plan, Paramount Pictures, which produced hits such as “Titanic” and “The Godfather,” would merge with its smaller counterpart, Skydance.
Paramount Class B shares rose in premarket trading after the news, which was first reported by The Wall Street Journal. The stock has lost more than a quarter of its value since the beginning of the year, as Paramount — owner of networks such as MTV and Nickelodeon — struggles with a declining cable business, a heavy debt load and a costly expansion of its streaming offerings.
The preliminary agreement comes after a previous round of negotiations failed last month. Unlike the previous round, National Amusements no longer insists that a majority of non-Redstone shareholders approve the Paramount merger. However, the proposed terms of the merger must be approved by a special committee of Paramount’s board of directors.
Oliver Gray contributed to this report.
