Paramount Global has entered exclusive merger talks with Skydance after turning down a $26 billion offer from private equity firm Apollo Global Management.
The production company now has 30 days to work out a potential deal.
On Sunday, Apollo made a $26 billion bid to buy the entire company, having previously tabled a $11 billion offer for Paramount’s movie studio alone.
The Wall Street Journal reported Paramount’s directors had opted to proceed with Skydance as it wasn’t clear how Apollo would finance its bid. However, people close to the Apollo bid told the Journal the private-equity firm wouldn’t need additional debt financing to buy Paramount because its existing capital structure could be rolled into a new deal.
Shari Redstone, Paramount Global’s controlling shareholder, has previously held talks with Ellison to sell National Amusements, the family media empire that owns about 77% of the voting shares of Paramount.
However, Skydance, which has collaborated with Paramount on movies including Top Gun: Maverick, wants to be certain it will be able to merge the two studios.
Outside of its movie business, Paramount owns the US network CBS, and digital services, Nickelodeon and MTV. It has been progressing with Paramount+, its streaming service it hopes will cushion it from falling advertising revenues.
