New Paramount Merger Scenario Has Skydance Reportedly Mulling All-Cash Bid For National Amusements

The Wall Street Journal reported this afternoon that Skydance, with backing from other investors, is considering an all-cash bid for National Amusements. The Shari Redstone-led company controls nearly 80% of Paramount shares and is the gatekeeper for any M&A deal.

Redstone became non-executive chair of Paramount’s board after spending years engineering a merger of CBS and Viacom, with the combined company rebranding as Paramount Global in 2022. She has reportedly grown increasingly interested in fielding offers for the company in recent months. Like many of its media peers, Paramount has lost significant value due to cord-cutting, streaming expenses and concerns about its debt.

Skydance and Paramount declined to comment. Reps from National Amusements and Paramount did not immediately respond to a request for comment.

The future of Paramount has been a fixture of industry conversations over the past month or more. Sources first reported that Skydance and RedBird Capital were taking a look at National Amusements, with that news giving Paramount shares a big boost, though they have been relatively flat in the intervening weeks.

Paramount shares perked up a bit after the latest report, but have been flat today. At $14.25, they are worth less than half what they were after the Viacom-CBS merger closed in December 2019.

One of the backers of the current bid by David Ellison’s Skydance is Ellison’s father, Oracle founder Larry Ellison, according to the WSJ report. The bid for control of National Amusements centers on Paramount Pictures, which Skydance has collaborated with extensively, financing several Mission: Impossible installments and 2022 megahit Top Gun: Maverick. The fit at Skydance of other core Paramount assets like CBS, its two-dozen-plus local TV stations and the cable TV assets is less clear.

One industry vet told Deadline the new report appeared to be “a little early” in the process given the extent of due diligence involved, including the data from Paramount+ and other streaming operations. “It’s not unusual for companies to leak these kinds of reports if they’re looking to boost their share price or get the attention of other potential suitors,” the source added.

In addition to its Paramount stake, National Amusements also runs a string of movie theaters. Byron Trott, Chairman and Co-CEO of BDT & MSD Partners, has been helping NAI evaluate its strategic options. Trott’s firm made a $125 million preferred equity investment in the company last spring.

While privately held firms like Skydance are circling Paramount, fellow media giant Warner Bros. Discovery has also expressed interest in a potential team-up. While WBD chief David Zaslav discussed a combo over lunch with Paramount CEO Bob Bakish just before Christmas, the talks have not progressed in the new year.

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