Paramount and Skydance Renew Merger Talks With Improved Offer

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Paramount has resumed merger talks with independent production studio Skydance Media just weeks after an earlier deal fell apart at the last minute, people familiar with the matter said.

Skydance’s new offer included a higher bid to close the deal, the sources said. Shari Redstone, who controls Paramount, abruptly ended negotiations during the first attempt last month.

David Ellison, the head of Skydance and son of billionaire Oracle founder Larry Ellison, managed to bring Redstone back to the negotiating table after he agreed to make the deal more advantageous for the company behind such legendary films as The Godfather, Titanic And Forrest Gumpadded the sources.

Paramount’s special committee, a subcommittee of its board that had indicated it was prepared to approve the previous Skydance deal before it was blocked by Redstone, had been tasked with evaluating the new offer, people said.

Redstone controls Paramount through his family’s National Amusements (NAI), which owns only about 10% of the Hollywood group but holds the vast majority of its voting rights.

There was no certainty that a new deal would be reached, and Paramount shareholders had a 45-day “go shop” right to seek a higher offer from other potential suitors, the people familiar with the matter said.

Barry Diller, the New York media mogul who lost to Redstone’s father, Sumner, in a fierce bidding war for Paramount in the 1990s, was also considering buying a majority stake in the Hollywood company, the sources said.

The New York Times was the first to report the resumption of negotiations between Skydance and Paramount and Diller’s potential interest.

Skydance was close to closing a deal last month after agreeing to offer about $2 billion to acquire Redstone’s NAI and then merge Paramount with Skydance through an all-stock deal.

As part of the offer, Skydance also agreed to buy out about half of Paramount’s common stock at $15 per share, while paying about $1.5 billion to help reduce the company’s debt.

Skydance received informal approval from the special committee for the deal and was ready to finalize it, but negotiations ended abruptly when Redstone’s attorney informed Ellison’s team that they had “been unable to reach mutually acceptable terms.”

Skydance declined to comment on the report. Paramount did not respond to calls seeking comment.