Sony Won’t Try to Get Back in the Mix for Paramount During Company’s ‘Go-Shop’ Period
Sony Won’t Try to Get Back in the Mix for Paramount During Company’s ‘Go-Shop’ Period
Paramount Global has a merger deal in place with Skydance Media, but is being allowed to shop that deal to ensure no one can beat it.
Skydance Media officially has one fewer competitor for Paramount Global. Those two companies have recently agreed to a two-step deal that will see Skydance acquire National Amusements Inc., the holding company that controls 77% of Paramount’s voting stock. Then Skydance and Paramount will be merged, but as part of the deal Paramount’s current ownership has asked for a 45-day “go shop” window to ensure no one else can exceed Skydance’s terms. A new report from Deadline indicates that Sony, which made the most serious attempt to purchase Paramount outside of Skydance earlier this year, is officially out of the running for the company now.
Key Details:
- Paramount has until Aug. 21 to continue seeking a better offer than the Skydance deal.
- Sony partnered with a private equity firm to bid for Paramount, and likely would have split the company and sold Paramount+.
- Any new proposals for Paramount must be for the purchase of the whole company, not just National Amusements.
Deadline reports that Sony won’t jump back in on the Paramount bidding now that Skydance’s deal is so far along. Sony first entered the picture back in May with a $26 billion offer, after an exclusive negotiating period between Skydance and Paramount came and went without a deal announcement. Sony had the backing of private equity firm Apollo Global Management, and would almost certainly have divided the company into multiple parts if they had succeeded.
In part, that split-up would have been required by law. As an internationally-owned company, Sony would not have been allowed to own an American broadcast channel like CBS, and its position as a content “arms dealer” would almost certainly have seen it try to sell Paramount+ as well. Many in Hollywood thought the play was mostly for Sony to get its hands on Paramount Picture’s storied lot, and were chagrined at the idea of seeing another major studio consolidated with a competitor.
Sony and Paramount got as far as signing non-disclosure agreements to get a closer look at each other’s finances, but by that time the regulatory issues surrounding the deal had already made it clear that significant modifications would be necessary. Things went quiet on the Sony front after that, and not long after Skydance jumped back into the mix with a renewed push that was ultimately successful.
Who Else Could Still Try to Buy Paramount Global?
The exit of Sony from the conversation means the only other entity confirmed to have made an actual offer for the company is now out. But there are still parties who expressed some level of interest hovering in the periphery. One key difference now that Skydance and Paramount have agreed to terms is that anyone who wants to try and get in on the process now must make a bid for the entirety of Paramount itself, instead of trying to buy National Amusements to get control of Paramount that way.
Barry Diller of IAC, and formerly head of Paramount Pictures was the most recent reported name to have interest. Diller and Paramount signed non-disclosure agreements just days before Paramount and Skydance announced they had a deal, though it’s not clear if he’s made an official offer or not.
Media executive Edgar Bronfman Jr. had interest in Paramount as well, though there has been no concrete reporting to indicate his efforts to buy the company have gone beyond mere interest. And while the number of twists and turns in the Paramount sale process so far doesn’t leave room for certainty, it seems highly unlikely that a party who has not entered the conversation yet will swoop down with a bid that exceeds Skydance’s offer before Aug. 21, the end of the “go-shop” window.
In short, for now, it appears that Paramount is Skydance’s to lose. Sony won’t be making a play for the company now, and other prospective buyers will have to come up with a better offer than Skydance and make the case that they won’t have any trouble with government regulators in order to have a chance to buy Paramount now.
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