Trouble for Skydance? Paramount receives last-minute $13.5B takeover bid
What's the story
US media conglomerate Paramount Global has received a last-minute $13.5 billion takeover bid from Project Rise Partners (PRP). The unexpected development comes as Skydance Media and RedBird Capital Partners finalize their acquisition of Paramount, backed by Larry Ellison. PRP's new offer surpasses its previous all-cash proposal and significantly exceeds the $8 billion deal from Skydance and RedBird.
Offer specifics
PRP's offer and market response
PRP has also sent a legal letter to Paramount's board, outlining its improved bid. The letter, written by law firm Baker & Hostetler, emphasizes that PRP is increasing its offer in light of "the market's negative reaction to the Skydance transaction." It mentions the offer for Class B shares is $19 per share as opposed to Skydance's $15 per stock—a 75% premium and 27% more than Skydance.
Investor information
Financing and investor details
The PRP bid is a full-cash offer with committed financing from credible investors. The identities of these investors remain largely unknown, barring Daphna Edwards Ziman (President and Co-Chairman of film and lifestyle TV network Cinemoi), and Moses Gross, the Founder and CEO of real estate company ANM Group. As per Variety, PRP is also backed by industry titans on par with Larry Ellison, including at least one of the world's wealthiest and a pioneer in the satellite industry.
Past disputes
Previous bid and legal allegations against Paramount
PRP had made an offer earlier, which they allege wasn't brought to the board. In October 2024, the group sent a legal letter accusing Paramount's special committee of violating its fiduciary duty to shareholders by not considering their previous $8.5 billion bid for the company. Their latest $13.5 billion proposal includes $5 billion for debt restructuring.
Future plans
PRP's offer promises growth and shareholder benefits
PRP's offer guarantees to expand Paramount Global's workforce, unlike the cuts proposed by Skydance and RedBird. Baker & Hostetler's letter also notes that under their proposal, Class B shareholders "would own 50% of the equity versus 30% in the Skydance offer." It adds that the PRP offer features an independent board and normal corporate governance, with board committees slated for elimination by Skydance being retained.
Valuation concerns
PRP questions Skydance's valuation in Paramount merger
PRP has raised concerns over the valuation of Skydance in its $8 billion merger deal with Paramount. The group's letter reads, "Skydance reported $25 million in EBITDA in 2023, and Paramount purchased Skydance for $4.75B, or approximately 200x trailing earnings." It goes on to argue that there are no market benchmarks that justify this valuation and no independent bidder would pay that price.