Some Paramount Global investors are speaking out about a possible merger with Skydance Media, calling on the U.S. media conglomerate to look at other options and to treat shareholders equitably if this deal should be inked.
Skydance, the studio that partnered with Paramount Pictures on such hits as ‘Top Gun: Maverick’, has been conducting exclusive talks with Paramount Global, the entertainment giant controlled by Shari Redstone.
Not all shareholders are enthusiastic.
One long-term shareholder on Thursday voiced concerns about investors getting a ‘raw deal’, while another, Ariel Investments, is pushing for a more thorough review of all alternatives, arguing shareholders would benefit, according to the firm’s spokesperson.
Paramount did not respond to requests for comment.
Paramount entered into a 30-day exclusive negotiating period with Skydance, as a special committee of the board evaluates the possible acquisition of the smaller independent studio in a stock deal worth $4 billion to $5 billion.
Skydance is negotiating separately to acquire National Amusements, a company that holds the Redstone family’s controlling interest in Paramount, according to a person familiar with the deal terms. That transaction is contingent upon a Skydance-Paramount merger.
Exclusive talks between the two parties began days after private equity firm Apollo Global Management submitted a $26 billion all-cash offer for Paramount Global that was described by two people familiar with the offer as ‘extremely preliminary’. Paramount’s enterprise value at the end of 2023 was about $22.5 billion.
“Any merger talks that forego competitive bidding in favor of an exclusive discussion with a single buyer, particularly where the reported control premium differentiates the financial position of a single shareholder over all other shareholders, is averse to the fair market value of a company,” Ariel said in a statement.
At the end of December, Ariel owned a 1.8% stake in Paramount, making it one of the company’s biggest investors.