Skydance Media (“Skydance”) and Paramount Global (NASDAQ:
PARA, PARAA) (“Paramount”) today announced that they have entered
into a definitive agreement to form “New Paramount” – a
next-generation media and technology leader, through a two-step
transaction including the acquisition of National Amusements, Inc.
(“NAI”), which holds the controlling share stake in Paramount, and
subsequently a merger of Skydance and Paramount Global.
The transaction combines the Skydance Investor Group’s
(“Skydance IG”) financial resources, deep operating experience, and
expertise in cutting-edge technology with Paramount’s iconic IP,
deep film and television library, proven hit-making capabilities,
and linear and streaming platforms that reach millions of viewers.
New Paramount will be a premier, creative-first destination for
storytellers, dedicated to top-quality content and will be
positioned to improve profitability, foster stability and
independence for creators, and enable more investment in growth
areas. The transaction will stabilize and strengthen Paramount as a
world-class media enterprise, with a focus on technological
advancements, across multiple entertainment platforms including
animation, gaming, film, sports, news and television.
The management team of New Paramount, led by David Ellison as
Chairman and Chief Executive Officer and Jeff Shell as President,
will draw on a wealth of operational experience and proven
expertise in driving creative and media company growth designed to
improve Paramount’s performance and foster further advancement.
Shari Redstone, Chair of Paramount Global and Chair, President,
and CEO of National Amusements, Inc. said, “In 1987, my father,
Sumner Redstone, acquired Viacom and began assembling and growing
the businesses today known as Paramount Global. He had a vision
that "content was king" and was always committed to delivering
great content for all audiences around the world. That vision has
remained at the core of Paramount’s success and our accomplishments
are a direct result of the incredibly talented, creative, and
dedicated individuals who work at the company. Given the changes in
the industry, we want to fortify Paramount for the future while
ensuring that content remains king. Our hope is that the Skydance
transaction will enable Paramount’s continued success in this
rapidly changing environment. As a longtime production partner to
Paramount, Skydance knows Paramount well and has a clear strategic
vision and the resources to take it to its next stage of growth. We
believe in Paramount and we always will.”
Importantly, the transaction preserves the over 100-year-old
legacy of Paramount as one of Hollywood’s most iconic production
companies and CBS’s stature as a cherished source of news and
entertainment. It also preserves American jobs, fosters continued
innovation and secures a prosperous future for the creative
community at Paramount, while protecting the legacy that viewers
across the globe know and love.
With a 15-year history of partnering on highly successful
projects, the Skydance-Paramount combination will unite key
intellectual property and enhance Paramount’s exposure in
cutting-edge and next-generation digital businesses. Skydance’s
exceptional pool of in-house creative animation talent, led by
pioneer John Lasseter, will expand Paramount’s animation
capabilities as well as consumer products opportunities over the
long-term.
Skydance offers Paramount critical investment and significant
entrees into burgeoning new entertainment and media verticals with
clear economic upsides. For example, Skydance brings
state-of-the-art interactive and gaming proficiencies, including
two in-house game developer studios with industry-leading
franchises, such as Skydance’s upcoming console games in Marvel and
Star Wars and hit VR game, The Walking Dead. Skydance also brings
an exciting partnership with the NFL, which complements the
resources of CBS and its local affiliates, creating a premier
global multi-sports studio. As a long-term global rights buyer with
expansive distribution across both direct-to-consumer and linear
channels, Paramount’s value proposition will be complemented as a
result of the transaction.
David Ellison, Founder and Chief Executive Officer of Skydance
said: “This is a defining and transformative time for our industry
and the storytellers, content creators and financial stakeholders
who are invested in the Paramount legacy and the longevity of the
entertainment economy. I am incredibly grateful to Shari Redstone
and her family who have agreed to entrust us with the opportunity
to lead Paramount. We are committed to energizing the business and
bolstering Paramount with contemporary technology, new leadership
and a creative discipline that aims to enrich generations to
come.”
Gerry Cardinale, Founder and Managing Partner of RedBird Capital
said: “The recapitalization of Paramount and combination with
Skydance under David Ellison’s leadership will be an important
moment in the entertainment industry at a time when incumbent media
companies are increasingly challenged by technological
disintermediation. As one of the iconic media brands and libraries
in Hollywood, Paramount has the intellectual property foundation to
ensure longevity through this evolution – but it will require a new
generation of visionary leadership together with experienced
operational management to navigate this next phase. RedBird is
making a substantial financial investment in partnership with the
Ellison family because we believe that the pro forma company under
this leadership team will be the pace car for how these incumbent
legacy media businesses will need to be run in the future.”
On behalf of the Special Committee, Charles E. Phillips, Jr.
said: “We are pleased to have reached an agreement that we believe
delivers to Paramount stockholders both immediate value and future
upside opportunity. The Special Committee, with the assistance of
independent financial and legal advisors, conducted a thorough
review of actionable potential transactions to drive value for our
stockholders. In addition to economic value, the Special Committee
took into account the certainty of closing and regulatory
approvals. Following extensive negotiations with Skydance, we
believe this proposed transaction will position Paramount for
success in a rapidly evolving industry landscape. Upon closing, it
will deliver immediate cash consideration at a premium to both the
minority Class A and Class B stockholders, who will also benefit
from what we believe to be considerable upside through continued
equity participation in New Paramount.”
Mr. Phillips continued, “The Special Committee would like to
thank our Co-CEOs George Cheeks, Chris McCarthy and Brian Robbins
for making significant progress on optimizing company operations in
a short period of time, positioning Paramount for a sustainable
transformation and a path to profitable growth going forward.”
Transaction Overview
The proposed merger creates immediate value, upside opportunity
and stability for all of Paramount’s stockholders and employees
during a period of industry transition. Under the terms of the
agreement, which has been approved by the Paramount Board of
Directors, acting on the unanimous recommendation of the Special
Committee, and by National Amusements, Inc. (“NAI”), majority owner
of Paramount’s Class A stock, Skydance will merge with Paramount in
a transaction valuing New Paramount at an enterprise value of
approximately $28 billion. Existing Skydance investors will receive
317 million newly issued Class B shares in New Paramount valuing
Skydance at $4.75 billion based on $15 per Paramount Class B
share.
Skydance IG, led by the Ellison Family and RedBird Capital
Partners, will invest up to $6 billion to:
- Offer Class A stockholders other than NAI an election to
receive in the merger $23 cash per share or 1.5333 shares of Class
B stock of New Paramount;
- Offer Class B stockholders other than NAI an election to
receive in the merger $15 cash per share or one share of Class B
stock of New Paramount, subject to proration if Class B elections
exceed $4.3 billion in the aggregate (approximately 48% of the
non-NAI float as of the date of this release);
- Use the additional capital to paydown debt and re-capitalize
the balance sheet of New Paramount to support strategic
initiatives.
The merger consideration represents a 48% premium to the price
of the Class B stock as of July 1, 2024, and a 28% premium to the
Class A stock on the same date. Also, by continuing to own shares
of the new combined company, Paramount Class B stockholders will
have the opportunity to participate in the new company's long-term
value creation potential.
NAI and its owners have entered into a definitive agreement to
sell NAI to Skydance IG for $2.4 billion on a cash-free, debt-free
basis. Following completion of the transaction, only Skydance IG
will hold Class A shares.
Following the close of the transaction and the growth equity
investment and assuming full participation in the cash election by
Class B stockholders, Class B stockholders will own approximately
30% of the outstanding equity of New Paramount and Skydance IG will
own approximately 70% of the outstanding equity of New
Paramount.
Management Team and Synergies
When the transaction closes, David Ellison will become Chairman
and Chief Executive Officer. Jeff Shell, Chairman of RedBird Sports
& Media and former CEO of NBCUniversal, will be President. Mr.
Ellison, as the founder and Chief Executive Officer of Skydance,
brings hands-on experience in building a successful creative media
and technology-enabled enterprise, with a proven track record of
strong content development including runaway hits like Top Gun:
Maverick. Mr. Shell brings deep operational expertise in leading
and transforming media and entertainment businesses.
The transaction will strengthen Paramount and enhance its
balance sheet flexibility, allowing the Company to invest in new
initiatives and deliver greater cash flow growth. The transaction
serves as a catalyst to re-imagine the Company’s operating model,
transform its technology platform, streamline its organization and
accelerate other initiatives already underway.
The overriding objective of the repositioned New Paramount
platform and properties is to bring stability to the business,
protect creative independence and to enable investment in growth
initiatives.
Board Approval
On January 2, 2024, the Board of Directors of Paramount formed a
Special Committee of independent directors to evaluate strategic
alternatives, including third party proposals. The Special
Committee reviewed, negotiated, unanimously approved and
recommended the Skydance transaction for approval by the Board.
Following formal approval by the Board, the Transaction Agreement
was signed.
Transaction Approvals
NAI, which holds approximately 77% of the Paramount Class A
shares, has delivered a written consent approving the
transaction. No further stockholder approval is required. The
consummation of the transaction is not subject to any financing
condition. Completion of this transaction is subject to regulatory
approvals and other customary closing conditions. The transaction
is anticipated to close in the first half of 2025.
“Go-Shop” and Further Information
The definitive Transaction Agreement includes a 45-day go-shop
period during which the Special Committee of Paramount’s Board of
Directors, with the assistance of its financial advisors, will be
permitted to actively solicit and evaluate alternative acquisition
proposals. There can be no assurance that this process will result
in a superior proposal, and Paramount does not intend to disclose
developments with respect to the go-shop process unless and until
it determines such disclosure is appropriate or is otherwise
required.
Further information regarding terms and conditions contained in
the Transaction Agreement will be made available in the Company’s
Current Report on Form 8-K, to be filed in connection with this
transaction.
Investor Call DetailsSkydance and Paramount
will host a call to discuss the transaction with securities
analysts on Monday, July 8, 2024, at 8:30 a.m. ET. A webcast of the
meeting will be available in a listen-only mode to individual
investors, media, and other interested parties
via edge.media-server.com/mmc/p/vrzasxwd or on Paramount’s
website at ir.paramount.com under the “Investors” section.
Presentation materials for the call will be available prior to the
call at approximately 8:15 a.m. ET and located under “Events and
Presentations” in the “Investors” section on the Paramount
website.
AdvisorsRedBird Advisors, BofA Securities,
Inc., Moelis & Company LLC and The Raine Group serve as
financial advisors to Skydance and the Investor Group. Latham &
Watkins LLP serves as legal counsel to Skydance and the Investor
Group. Sullivan & Cromwell LLP serves as legal counsel to
RedBird Capital Partners. BDT & MSD Partners serves as
financial advisor to National Amusements, Inc. and Ropes & Gray
LLP serves as legal counsel. Centerview Partners LLC serves as
financial advisor to the Paramount Special Committee and Cravath,
Swaine & Moore LLP serves as legal counsel. Rothschild & Co
serves as financial advisor to Paramount Global and Simpson Thacher
& Bartlett LLP serves as legal counsel.
About SkydanceSkydance is the diversified media
company founded by David Ellison in 2010 to create high-quality,
event-level entertainment for global audiences. The company first
launched with Feature Films and has since strategically expanded to
include Television, Games, Animation, and Sports, with studios in
Los Angeles, Silicon Valley, Spain, and Canada. In total,
Skydance’s films have earned more than $8 billion at the worldwide
box office and include the box office record-breaking and Academy
Award winning film Top Gun: Maverick. The studio’s other recent
releases include Mission: Impossible - Dead Reckoning and
Transformers: Rise of the Beasts; as well as, The Family Plan on
Apple TV+; The Adam Project and The Old Guard on Netflix, and The
Tomorrow War on Prime Video. The studio’s upcoming film slate
includes The Gorge, Mayday, and Fountain of Youth for Apple TV+;
The Old Guard 2 for Netflix; and the eighth installment of the
Mission: Impossible global franchise.
Skydance Television is a leading supplier of premium scripted
content across a range of platforms including Netflix, Amazon Prime
Video, and Apple TV+. The studio’s current slate includes the
Emmy-nominated series Grace and Frankie, which became Netflix’s
longest running series following the release of its final season
last year, as well as Foundation, Reacher, Tom Clancy’s Jack Ryan,
Cross, The Big Door Prize, and FUBAR. Skydance Games delivers
blockbuster gaming experiences of all kinds and is known for
high-quality visuals and rich narratives. Encompassing each of the
company’s two gaming studios, the Skydance Games’ portfolio holds
award-winning titles across console, VR, PC, and mobile, including
Archangel and The Walking Dead: Saints & Sinners, and the
upcoming Skydance’s Behemoth, Marvel 1943: Rise of Hydra, and a
collaboration with Lucasfilm Games set in the legendary Star Wars
galaxy.
Skydance Animation develops and produces high-end feature films
and television series with full production capability across two
studios in Los Angeles and Madrid. In addition to the studio’s
first animated feature, Luck, Skydance Animation’s slate includes
the upcoming feature films Spellbound, Pookoo, Ray Gunn and an
untitled Jack and the Beanstalk project for Netflix and the series
WondLa for Apple TV+.
Skydance Sports, the joint venture between the NFL and Skydance,
develops premium scripted and unscripted sports-related content,
documentaries, and events. The Sports studios’ slate includes NFL
Draft: The Pick Is In, Kelce, Hard Knocks: Offseason with the New
York Giants, and the Golden Globe nominated feature Air as well as
an upcoming docuseries chronicling the Dallas Cowboys’ dynasty and
franchise owner Jerry Jones and Holiday Touchdown: A Chiefs Love
Story for the Hallmark Channel.
About ParamountParamount Global
(NASDAQ: PARA, PARAA) is a leading global
media, streaming and entertainment company that creates premium
content and experiences for audiences worldwide. Driven by iconic
consumer brands, Paramount's portfolio includes CBS, Paramount
Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount+ and
Pluto TV. Paramount holds one of the industry's most extensive
libraries of TV and film titles. In addition to offering innovative
streaming services and digital video products, the company provides
powerful capabilities in production, distribution, and advertising
solutions.
For more information about Paramount, please
visit www.paramount.com and follow
@ParamountCo on social platforms.
About National Amusements, Inc.National
Amusements, Inc. is a world leader in the motion picture exhibition
industry operating 759 movie screens in the U.S., U.K. and Latin
America. National Amusements delivers a superior entertainment
experience in theatres around the world under its Showcase, Cinema
de Lux, Multiplex, SuperLux and UCI brands. Based in Norwood,
Massachusetts, National Amusements is a closely held company
operating under the fourth generation of leadership by the Redstone
family, through which they have been the majority voting
shareholders of Paramount Global for more than 35 years. National
Amusements, directly and through subsidiaries, owns 77.4% of the
Class A (voting) common stock of Paramount Global and 5.1% of the
Class B common stock, constituting approximately 9.5% of the
overall equity of the Company.
About RedBird Capital PartnersRedBird Capital
Partners is a private investment firm that builds high-growth
companies with strategic capital solutions to founders and
entrepreneurs. The firm currently manages $10 billion in assets on
behalf of a global group of blue-chip institutional and family
office investors. Founded in 2014 by Gerry Cardinale, RedBird
integrates sophisticated private equity investing with a hands-on
business-building mandate that focuses on three core industry
verticals – Sports, Media & Entertainment, and Financial
Services. Over his 30-year investment career, Cardinale has
partnered with founders and entrepreneurs to build some of the most
iconic growth companies in their respective industries. For more
information, please go to www.redbirdcap.com.
Important Information About the Transactions and Where
to Find It In connection with the proposed transactions
involving Paramount, Skydance and NAI (the “Transactions”),
Paramount will file with the Securities and Exchange Commission
(the “SEC”) a registration statement on Form S-4 that will include
an information statement on Schedule 14C and that will also
constitute a prospectus of Paramount. Paramount may also file other
documents with the SEC regarding the Transactions.
This document is not a substitute for the information
statement/prospectus or registration statement or any other
document that Paramount may file with the SEC. INVESTORS AND
SECURITY HOLDERS OF PARAMOUNT ARE URGED TO READ THE REGISTRATION
STATEMENT, WHICH WILL INCLUDE THE INFORMATION STATEMENT/PROSPECTUS,
AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED
WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE
DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTIONS AND
RELATED MATTERS. Investors and security holders may obtain free
copies of the registration statement on Form S-4 (when available),
which will include the information statement/prospectus, and other
documents filed with the SEC by Paramount through the website
maintained by the SEC at www.sec.gov or by contacting the investor
relations department of Paramount (+1-646-824-5450;
jaime.morris@paramount.com).
No Offer or SolicitationThis communication is
for informational purposes only and is not intended to and does not
constitute an offer to subscribe for, buy or sell, or the
solicitation of an offer to subscribe for, buy or sell, or an
invitation to subscribe for, buy or sell, any securities or a
solicitation of any vote or approval in any jurisdiction, nor shall
there be any sale, issuance or transfer of securities in an
jurisdiction in which such offer, invitation, sale or solicitation
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended, and otherwise in accordance with applicable law.
Cautionary Notes on Forward-Looking
StatementsThis communication contains both historical and
forward-looking statements, including statements related to our
future results, performance and achievements. All statements that
are not statements of historical fact are, or may be deemed to be,
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Similarly, statements
that describe our objectives, plans or goals are or may be
forward-looking statements. These forward-looking statements
reflect our current expectations concerning future results and
events; generally can be identified by the use of statements that
include phrases such as “believe,” “expect,” “anticipate,”
“intend,” “plan,” “foresee,” “likely,” “will,” “may,” “could,”
“estimate” or other similar words or phrases; and involve known and
unknown risks, uncertainties and other factors that are difficult
to predict and which may cause our actual results, performance or
achievements to be different from any future results, performance
or achievements expressed or implied by these statements. Important
risk factors that may cause such a difference include, but are not
limited to: (i) that the Transactions may not be completed on
anticipated terms and timing (or at all), (ii) that a condition to
closing of the Transactions may not be satisfied, including the
failure to receive any required regulatory approvals from any
applicable governmental entities (or any conditions, limitations or
restrictions placed on such approvals), (iii) that the anticipated
tax treatment of the Transactions may not be obtained, (iv) the
potential impact of unforeseen liabilities, future capital
expenditures, revenues, costs, expenses, earnings, synergies,
economic performance, indebtedness, financial condition and losses
on the future prospects, business and management strategies for the
management, expansion and growth of the combined business after the
consummation of the Transactions, (v) potential litigation relating
to the Transactions that could be instituted against Paramount or
its directors, (vi) potential adverse reactions or changes to
business relationships resulting from the announcement or
completion of the Transactions, (vii) any negative effects of the
announcement, pendency or consummation of the Transactions on the
market price of Paramount’s common stock and on Paramount’s or
Skydance’s operating results, (viii) risks associated with third
party contracts containing consent and/or other provisions that may
be triggered by the Transactions, (ix) the risks and costs
associated with the integration of, and the ability of Paramount
and Skydance to integrate, the businesses successfully and to
achieve anticipated synergies, (x) the risk that disruptions from
the Transactions will harm Paramount’s business, including current
plans and operations or by diverting management’s attention
Paramount’s ongoing business operations, (xi) the ability of
Paramount to retain and hire key personnel and uncertainties
arising from leadership changes, (xii) legislative, regulatory and
economic developments, (xiii) the other risks described in
Paramount’s most recent annual report on Form 10-K and quarterly
report on Form 10-Q, and (xiv) management’s response to any of the
aforementioned factors. There may be additional risks,
uncertainties and factors that we do not currently view as material
or that are not necessarily known.
These risks, as well as other risks associated with the
Transactions, will be more fully discussed in the information
statement/prospectus that will be included in the registration
statement on Form S-4 that will be filed with the SEC in connection
with the Transactions. While the list of factors presented here is,
and the list of factors to be presented in the registration
statement on Form S-4 is, considered representative, no such list
should be considered to be a complete statement of all potential
risks and uncertainties. Unlisted factors may present significant
additional obstacles to the realization of forward-looking
statements. Consequences of material differences in results as
compared with those anticipated in the forward-looking statements
could include, among other things, business disruption, operational
problems, financial loss, legal liability to third parties and
similar risks, any of which could have a material adverse effect on
Paramount’s consolidated financial condition, results of
operations, credit rating or liquidity. The forward-looking
statements included in this communication are made only as of the
date of this communication, and we do not undertake any obligation
to publicly update any forward-looking statements to reflect
subsequent events or circumstances, except as otherwise required by
applicable law.
Contacts:
Skydance Media & RedBird CapitalMelissa
Zukerman Principal Communications Groupmelissa@pcommgroup.com(323)
658-1555
Dan GagnierGagnier Communicationsskydance@gagnierfc.com(646)
569-5897
Paramount GlobalMedia: Justin DiniExecutive
Vice President, Head of Communications(212)
846-2724justin.dini@paramount.com
Allison McLartySenior Vice President, Corporate and Financial
Communications(323) 376-7903allison.mclarty@paramount.com
Investors:Jaime MorrisExecutive Vice President, Investor
Relations(646) 824-5450 jaime.morris@paramount.com
National AmusementsMolly Morse / Daniel
Hoadley(212) 521-4826 / (212) 521-4850molly.morse@kekstcnc.com /
daniel.hoadley@kekstcnc.com
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