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From Paramount (FOR) shares rose on Wednesday, about 8% in early trading, after the The Wall Street Journal reported that the media giant’s merger with Skydance Media is reportedly back on the table.
Shari Redstonewhich controls Paramount through its family holding company, National Amusements (NAI), has ended merger negotiations with Skydance in June after months of talks.
According to the Journal, under the proposed new deal, Skydance would buy National Amusements for $1.75 billion and then merge with Paramount, which owns a slew of media assets including CBS, BET, Showtime and MTV, in addition to its namesake studio and streaming platform.
The two sides also agreed to a 45-day “trial period” allowing other potential bidders to submit offers.
“There’s a lot of uncertainty,” Bloomberg Intelligence senior analyst Geetha Ranganathan said of the new deal in an interview with Yahoo Finance, adding that the terms “are not very clear at this point.”
But what seems clearest is that Redstone will be protected from the threat of litigation from non-voting shareholders — a main reason why the media mogul called off the deal last month.
“It appears that this time around there is much stronger indemnification language in the agreement that should or could protect it from a lot of the future litigation,” Ranganathan said.
But that doesn’t mean things are completely set in stone, especially if history is any indication.
Skydance, which has previously collaborated with Paramount on popular film franchises including “Mission: Impossible,” “Top Gun: Maverick” and “Transformers,” reportedly revised your offer several times after non-voting shareholders concerns expressed on the terms of the initial discussions, which would have given Redstone $2 billion in cash as a first step in the transaction.
The negotiation turmoil has been a drag on the company overall. Amid the drama, Paramount announced the departure from CEO Bob Bakish in late April, after he was allegedly at odds with Redstone on the Skydance deal. He was replaced by an “Office of the CEO” consortium made up of three division heads of the company.