According to insiders, media heiress Shari Redstone abruptly ended negotiations with David Ellison's Skydance Media on Tuesday, causing a potential deal to sell Paramount Global's controlling stake to the independent studio to fall apart.
As the largest shareholder of Paramount, Redstone made this decision just as the agreement was about to be finalized. A special committee of Paramount's board had planned to discuss the proposed deal, but canceled the discussion after receiving news of Redstone ending the negotiations.
Redstone, the daughter of the late media mogul Sumner Redstone, had planned to sell her family's stake to Ellison for $2.25 billion. This transaction was part of a complex $8 billion deal that would eventually merge the historic Hollywood studio Paramount with the smaller Skydance.
After reaching an agreement on economic terms, National Amusements stated, "We were unable to reach agreement with Skydance on other unspecified issues." The company did not provide further details. The Wall Street Journal first reported the breakdown of this deal and mentioned that Redstone might continue to attempt to sell National Amusements without trying to integrate Paramount into another company.
National Amusements owns cinemas in the United States, the UK, and Latin America, and holds 77% of Paramount's Class A voting shares on behalf of the Redstone family. Two parties are interested in Paramount's shares: independent Hollywood producer Steven Paul and Seagram's heir Edgar Bronfman, the latter supported by private equity firm Bain Capital.
According to someone familiar with Redstone's thinking, these potential buyers offered Redstone alternatives to Skydance, potentially sparking a lucrative bidding war.
The Skydance deal fell apart after more than six months of negotiations. According to multiple sources, Redstone and Skydance had agreed on the economic terms proposed by Ellison and his bidding partners, Redbird Capital and KKR.
