Shares of Paramount Global took a hit in afternoon trading following a CNBC report suggesting Sony might be reconsidering a joint bid with Apollo for the company. However, a source familiar with the situation clarified that there is no indication Sony is backing out of the deal. The report hinted at a potential restructuring of what would be a complex transaction.
The studio and private equity fund had made a preliminary $26 billion offer for the company controlled by Shari Redstone just as Par’s exclusive negotiating window with Skydance came to an end earlier this month. Despite the expiration of the window, the offer from the David Ellison-led studio, backed by Larry Ellison and RedBird Capital, remains on the table.
A special committee of the Paramount Global board convened to discuss the Sony-led deal, which is the preferred choice of Paramount stockholders. Sony and Apollo would need to conduct due diligence on Paramount’s financials and operations to finalize their offer, but this process has not yet commenced, leading to potential impatience from the partners. CNBC also highlighted Sony’s fluctuating stock price and ongoing challenges in linear television.
The joint offer would encounter regulatory scrutiny on multiple fronts. Paramount’s stock, which had been performing well earlier in the session, saw a more than 5% drop, now trading at around $12.35. Deal speculation has been impacting the shares throughout the year.
Following a period of intense news surrounding the Skydance revised offer, things have quieted down on the Par deal front. Skydance’s proposal involves acquiring Redstone’s controlling stake and a pro-rated number of shares held by other stockholders, effectively taking Paramount private. On the other hand, Sony and Apollo would purchase the company for cash, also leading to its privatization.
