Paramount says no to new $13.5 billion takeover offer
Paramount says no to new $13.5 billion takeover offer
The company says that it is no longer looking for new offers after completing a merger deal with Skydance Media.
It appears that an eleventh-hour effort by an investor group named Project Rise Partners (PRP) to buy Paramount Global is too little, too late. Paramount has responded to a letter from the group insisting that it had a superior offer to Skydance Media’s on the table, informing PRP that it was no longer accepting bids and that it was committed to moving forward with the Skydance merger as planned.
Key Details:
- Paramount will not engage with Project Rise Partners regarding its potential bid.
- On Jan. 24, PRP’s lawyers sent a letter to Paramount with revised deal terms they say were better than the Skydance offer.
- Paramount is still hoping to close a two-step merger process with Skydance in the next few months.
The Paramount special committee formed to consider merger and acquisition opportunities sent out a statement on Monday regarding the new buyout offer from Project Rise Partners. Paramount’s representatives say that the time for new bids has passed and that it will not be putting PRP’s offer on the table for discussion.
“The transaction agreement between Paramount and Skydance Media enabled the Special Committee to pursue a superior proposal during the now-expired 45-day go-shop period, during which representatives of the Special Committee contacted more than 50 third parties to determine whether they had an interest in making a proposal to acquire Paramount,” Paramount’s statement said. “Project Rise Partners did not make a proposal during such period, nor during the prior seven-month sale process for Paramount. It is unclear what PRP’s objectives are; however, Paramount is bound by its agreement with Skydance Media and there will not be any engagement with PRP in contravention of such agreement.”
The communique is a response to a letter sent to Paramount by PRP lawyers on Jan. 24, saying that it had a duty to consider PRP’s improved offer. PRP said it had compiled a $13.5 billion total bid for Paramount and improved on the payout for Class B shareholders as compared to what Skydance was offering.
As a publicly traded company, Paramount is legally bound to consider offers that could potentially benefit its shareholders. However, PRP’s failure to submit its bid either during the Paramount sale process or the 45-day “go-shop” window built into the Skydance deal may mean that Paramount is now free of this obligation.
Skydance will merge with Paramount in a two-step deal worth $8 billion total. First, Skydance will purchase National Amusements Inc., the holding company that owns the majority of Paramount’s voting stock. Then, Skydance will officially merge its studio with Paramount. Barring any other last-minute bids, that process is still free to move forward, and barring interference from government regulators could wrap up in the coming months.
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