The exclusivity window for discussions between David Ellison's Skydance, backed by private equity firms RedBird Capital and KKR, and Paramount ends Friday and won't be extended, people familiar with the matter mentioned Paramount shares rose following the report.
The consortium has been waiting for word from Paramount's special committee on whether the panel will recommend its bid to acquire the company to Redstone. Now, with Apollo and Sony formally expressing interest in acquiring the company for about $26 billion, the Skydance group is looking for Redstone to reaffirm her commitment to the deal.
The Skydance consortium is not keen to hang around to be a stalking horse offer for Apollo and Sony, one of the people said. Still, depending on what Redstone says, Ellison may be willing to work with her, a second person said.
Spokespeople for Skydance, Redstone's National Amusements and Paramount's special committee declined to comment on Friday.
Apollo and Sony made their latest offer Thursday, CNBC previously reported. The special committee is currently considering the bid, the people said.
As part of Skydance's latest deal on the table, Redstone may take less than $2 billion for her controlling stake in Paramount, which is lower than Skydance's initial offer. The consortium is contributing additional capital to pay common, Class B shareholders at a nearly 30% premium to the undisturbed trading price of about $11 per share. In total, Redstone and Skydance would contribute $3 billion, with the vast majority going to Class B shareholders, according to people familiar with the matter.
Skydance's valuation as part of the deal remains around $5 billion, the people said. It's unclear if the Apollo-Sony offer gives Redstone the same premium.
Previously, Redstone rejected an offer by Apollo in favor of exclusive talks with Skydance. Redstone has preferred a deal that would keep Paramount together, as Skydance's offer would. A private equity firm is likely to break up the company.
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