Sony Working on Joint Bid to Acquire Paramount with Apollo Global Management
If Skydance and Paramount exit their exclusive negotiating period without a deal, Sony and Apollo could be ready to step up.
Will there someday be a “Succession“-style show dedicated to the sale process of Paramount Global? The amount of twists and turns the saga has taken in the past few months could make for compelling television, and now a new wrinkle has emerged. The New York Times reports that Sony Pictures Entertainment is discussing the possibility of a joint bid to acquire Paramount with Apollo Global Management, which has unsuccessfully attempted to purchase Paramount multiple times in the past.
- One possible deal structure would see Apollo serve as minority partner, with Sony in majority control of Paramount.
- Apollo lodged a $27 billion bid for Paramount but was rebuffed as Paramount entered into exclusive negotiations with Skydance Media.
- The two companies cannot make an official offer to Paramount until it exits its exclusive negotiating period with Skyadance.
The Times reports that Sony and Apollo are still working out the structure of their potential offer, but one scenario could see Sony take majority control of Paramount while Apollo serves as a minority partner, but there are other options on the table as well. There were specific details on the amount Sony and Apollo could bid on the platform.
Apollo has been circling the possibility of doing business with Paramount for more than a month. In mid-March, reports first began to circulate that the private equity firm had contacted Paramount’s special committee for considering mergers and acquisitions with a potential offer. Later reports indicated that Apollo had made an offer around $26 billion for the entirety of Paramount.
Executives from Paramount reportedly rejected that offer without even discussing it, preferring a bid from David Ellison of Skydance Media. In early April, Paramount and Skydance entered into an exclusive negotiating period to help get a deal finalized; Sony and Apollo cannot make their own bid until the exclusivity window ends.
Which Deal is Best for Paramount?
It appears that there is something of a schism between what Paramount’s controlling shareholder Shari Redstone wants out of a deal, and what its other shareholders want. One such Paramount stakeholder said he’d rather see none of the offers currently on the table be accepted, and instead preferred to see Paramount continue as an independent company. Many other prominent figures connected with Paramount have objected to the Skydance deal in particular.
Deadline reports that many in Hollywood viewed Apollo’s initial offer for Paramount distastefully, as it was assumed by many that the private equity firm would break up Paramount’s assets like CBS and Paramount+ and sell them off one by one. However, the Sony offer could be viewed differently, as Paramount’s media assets would fall under the control of an actual media company. After years without an on-demand streaming service of its own, Sony could simply buy one ready-made in Paramount+.
The Skydance deal would see Paramount’s shareholders receive stock while Redstone gets cash for her shares in the company, which is why so many other investors have objected. The Sony/Apollo offer would be all cash, which would likely win the approval of more Paramount shareholders than the Skydance agreement has thus far.
For now, the exclusive negotiating period between Skydance and Paramount continues. But if the two companies reach the first week of May without a deal, it will leave room for Sony and Apollo to swoop in and potentially make an offer that Paramount can’t refuse.
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