David Ellison’s Skydance Subsidiary Announces $8 Billion Investment in Paramount Acquisition

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David Ellison’s Skydance Media has announced an $8 billion deal to buy Paramount Global, ending a seven-month quest.

The company had received approval from a special committee of Paramount’s board earlier Sunday. The board then approved the proposed two-step transaction, first the acquisition of National Amusements Inc., the entity led by Shari Redstone that controls about 80 percent of Paramount’s voting stock. That transaction will be followed by a full merger.

Paramount Class A shareholders will receive $23 per share in cash or stock. Class B shareholders will receive $15 per share in cash or stock. The cash consideration available to public shareholders is $4.5 billion.

Ellison will serve as chairman and CEO, and former NBCUniversal executive Jeff Shell will lead the company as president.

In a press release, Skydance said it would “reposition Paramount to improve profitability, foster stability and independence for creators, and enable greater investment in faster-growing digital platforms.”

The all-stock transaction values ​​Skydance at $4.75 billion. Skydance shareholders will receive 317 million Class B shares, valued at $15 per share.

Skydance Investor Group, comprised of the Ellison family and RedBird Capital Partners, will invest $2.4 billion to acquire National Amusements in cash. It will then pay $4.5 billion in stock-for-cash merger consideration to be paid for the publicly traded Class A and Class B shares, as well as $1.5 billion in primary capital to be added to Paramount’s balance sheet.

Following the closing of the transaction, Skydance Investor Group will own 100% of the outstanding Class A shares of “New Paramount” and 69% of the outstanding Class B shares, representing approximately 70% of the pro forma shares outstanding.

The cash amount per share that will be offered to Paramount shareholders represents a 48% premium to the price of Class B shares on July 1, 2024 and a 28% premium to Class A shares on the same date.