#BlockTheMerger: Could Sony And Apollo's Possible Acquisition Of Paramount Global Be A Good Thing For MTV And Nickelodeon?

Not long ago, it was reported that Sony and Apollo would be making a joint bid to acquire Paramount Global. This comes after Paramount Global had rejected Apollo's initial offer as talks are still underway with Skydance over a possible restructure.

Similar to Canal+, Sony faces legal hurdles as foreigners are given restrictions pertaining to ownership of a local company. Apollo Global Management is basically their BBBEE or another case they're way of securing the entertainment company. 

Sources had outlined that Sony was looking to distance themselves from the streaming wars years after closing and selling their linear operations. Apollo was looking to possibly merge Paramount+ with another streamer putting its future in a dark corner.

Not that the content would be phased out in the process but if you're living abroad and getting a portion of this content on Paramount+. Them closing and merging it with another broadcaster further lessen the lineup.

Same goes with the Paramount trademark in general as it could as well be folded under Sony.

As for their linear operations, don't expect much improvement there content wise as consumption and revenue for these channels continue to decline. If anything, don't be surprised if they choose to close/sell a few if not all channels globally.

Apollo had hinted at that when making the initial bid for Paramount with film studios. When you look at it, Nickelodeon and MTV would probably be more like CW reliant on third party content and archived material from Paramount while first run content are shipped to other platforms. 

This is an endeavor we envision could await local consumers in the United States while other countries go through a similar fate as Disney's FOX and Disney XD channels.

The Canal+/MultiChoice Effect: Sony Reportedly In Talks To Join Bid With Apollo To Acquire Paramount Global

Even as Paramount Global continues to hold exclusive talks with David Ellison’s Skydance and Gerry Cardinale’s Redbird Capital, another potential buyer group is considering its own moves.

It has been confirmed that executives at Sony Corp., including Sony Pictures chief Tony Vinciquerra, have been in touch with Apollo Global Management about making a joint bid for the entertainment company.

Apollo had previously made a $26 billion offer for Paramount, inclusive of equity and debt, though it was reportedly dismissed. But partnering with Sony would likely eliminate any cash or financing concerns.

The New York Times first reported the Sony talks, adding that no offer has been made, given that the exclusive negotiating window is still in place. The Times reported that one structure under consideration would see Sony and Apollo effectively take Paramount private, with Sony owning a majority of the company, with Apollo operating as a minority owner..

The actual structure of the deal is not clear, though the Paramount film and TV studios would likely fit in nicely with Sony’s own studios. It would raise questions about both Paramount+, given Sony’s decision to avoid entering the streaming wars, as well as Paramount’s linear TV assets, including CBS. There are federal regulations restricting foreign ownership of U.S. broadcast stations, and as a Japanese company Sony could face scrutiny under such rules.

Meanwhile, the talks between Skydance and Paramount continue, with a source saying that the Ellison-led company has articulated a plan to deliver operating efficiencies, and to leverage the executive teams at both Skydance and Redbird (including former NBCUniversal CEO Jeff Shell), to help turn Paramount around. Paramount would remain a public company under the Skydance deal.

Some investors have complained about the decision not to pursue the Apollo deal, given the all-cash offer.

Shares in Paramount rose in after-hours trading, after reports about the talks were published.

Apollo Global Offered $27 Billion For All Of Paramount Global But The Bid Was Rejected

Private-equity giant Apollo Global Management made a $27 billion offer to acquire all of Paramount Global this week, sources familiar with the bid told the media. However, the special committee set up by the Paramount Global board of directors to consider M&A options declined to engage with the bid.

Apollo submitted an all-cash bid on Sunday, March 31, to acquire Paramount Global in a deal worth more than $27 billion of total enterprise value, encompassing equity and debt, according to people familiar with the situation. That came after Apollo had offered $11 billion to buy Paramount Pictures alone, a bid that was also rebuffed by Paramount’s committee. Shari Redstone is Paramount’s controlling shareholder and president of National Amusements Inc., its parent company. But given the potential conflict of interest, Redstone is not a member of the board’s special committee.

NAI, Paramount Global and Apollo have declined to comment on the M&A talks.

Word of Apollo Global’s new bid for Paramount Global comes as Redstone entered into an exclusive negotiating period with David Ellison’s Skydance Media to sell her stake in National Amusements Inc. (and thereby pave the way for Skydance to merge with Paramount Global). NAI holds 77% of the voting shares in Paramount Global.

Redstone’s preference is for Paramount Global be sold as a whole, not in pieces. It’s not clear why the media company’s special committee would have not considered Apollo’s $27 billion bid for the entire company.

It was reported Tuesday that Redstone and Skydance were close to establishing 30-day window for exclusive deal talks after months of discussions. NAI and Skydance have now entered into a provisional agreement covering such exclusive negotiations, likely with a basic outline of potential deal terms, according to sources.

Paramount Global’s market cap stood at $9.26 billion after the market closed Wednesday. The stock shot up 15% in the final hour of trading Wednesday amid a cascade of media reports that Redstone, National Amusements Inc. and Skydance are moving closer to a deal. Shares closed at $13.52.

Paramount Global’s assets include Paramount Pictures; the CBS network and owned local stations; cable networks including Comedy Central, BET, MTV and Nickelodeon; and the direct-to-streaming business housing Paramount+ and Pluto TV.

Apollo Global Management Offered To Buy Paramount Global Studios For $11 Billion

Recently, we learned that Warner Bros. Discovery and Skydance Media are both in talks to buy a majority control of Paramount. Only last month to find out that Warner Bros. Discovery was no longer interested. Now, the Wall Street Journal reports that Appollo Global Management has offered to buy the film and TV studio for $11 billion.

This deal is only for the studios and is very different from other offers to buy or merge with all of Paramount. This includes an offer from Skydance to merge with Paramount.

Talks with Skydance are reportedly in the early phases and could easily fall apart, especially with investment firms now possibly driving up the price of Paramount. No date for an auction has been revealed, but bankers have reportedly started the process of sharing details about Paramount with potential bidders, it is reported that Redstone is looking at selling its share of Paramount at auction to the highest bidder.

Currently, Paramount Global is controlled by media executive Shari Redstone. Redstone also controls National Amusements, which owns 77% of Paramount’s voting shares. Reportedly the Redstone family is also looking to sell their 77% ownership of Paramount.

Any new owner of National Amusements would control Paramount’s cable TV networks, which include Nickelodeon, Comedy Central, MTV, and multiple movie theaters.

The news comes as the entertainment industry faces difficult times with cable TV viewership is declining and a majority of streamers struggling to achieve profitability. Paramount’s streaming service, Paramount+, is among the companies fighting to stay afloat.

Apollo Global Management Also Looking To Acquire Paramount Global

Private equity firm Apollo Global Management has “reached out” to Paramount Global about a possible buyout or purchase of some of its holdings, Axios reported Tuesday.

The company faces competition, including a bid from Byron Allen, who in January offered to buy Paramount Global for $14 billion. The entertainment conglomerate’s parent, National Amusements, has also gotten an offer from David Ellison’s Skydance Media in a bid that was backed by rival private equity firms RedBird Capital Partners and KKR.

Warner Bros. Discovery also reportedly considered buying some or all of the entertainment conglomerate’s assets, but backed off last month.

The report said Apollo is looking at a deal only with Paramount, which would involve Paramount Pictures, the CBS network, along with Comedy Central, BET and other Viacom cable networks and the streaming services Paramount+ and PlutoTV.

“It’s also possible that Apollo could wind up bidding only on select assets,” Axios reported, citing two sources familiar with the matter.

Shares of Paramount Global initially jumped about 5% on the report, but the gains quickly disappeared. The stock was trading down 5 cents to 11.57, down nearly 20% since the start of the year, in late morning.

Apollo has long invested in news and entertainment companies, including purchasing “American Idol” owner CKx in 2011. It also has or previously held interests in Barnes & Noble, Cox Media Group, Legendary Entertainment, Redbox, Sirius Satellite Radio. It also bought Yahoo Inc. from Verizon in 2021.

Apollo Global Management Is Looking To Set It's Bid For A Possible Acquisition Of Paramount Global

National Amusements, Inc., the Shari Redstone-led company that owns the majority of voting shares in Paramount Global, is reportedly fielding interest from another entity mulling an acquisition offer. Apollo Global Management is among the wealthy individuals and companies that have contacted the investment bank advising NAI, BDT & MSD Partners, according to Bloomberg.

NAI owns a portfolio of movie theaters as well as nearly 80% of voting shares. As with recently discussed scenarios involving Skydance Media and RedBird Capital, the Apollo deal would be a route to gain control of Paramount, though the voting shares owned by NAI do not represent a majority of the economic value of the company, only most of its voting class of shares.

Redstone, who spent years gaining control of Viacom and CBS, withstanding legal challenges and objections from critics including her own father, the late Sumner Redstone, has been more willing than ever to entertain offers. Paramount, which was formed when Viacom and CBS reunited in 2019, has struggled due to pay-TV cord-cutting, a soft ad market, a loss-producing streaming operation and volatility in the movie business. While its namesake film studio has had its share of hits, including last weekend’s Mean Girls, the broader company does not have the scale of many media rivals. With its stock worth less than half of what it was when the merger closed, Redstone reportedly is open to turning the page if the right offer comes along.

Paramount shares perked up late in the trading day Friday on the report of Apollo’s interest, rising 2% to close at $13.40.

Apollo is one of the more active private equity players in media, with stakes in companies like Dune producer Legendary Entertainment, Peter Chernin’s North Road, Cox Media Group and Yahoo. It has also been a player in the TV station sector, taking part in the proposed takeover of Tegna by Standard General, which was ultimately quashed by regulators.