Paramount International has held talks a couple of sale of its legendary Hollywood studio and different belongings to Skydance, the manufacturing firm behind Prime Gun: Maverick, based on sources accustomed to the corporate managed by Shari Redstone.
Skydance, whose shareholders embody the Ellison household and RedBird Capital Partners, has emerged as a number one contender to take over Paramount partly as a result of sturdy ties between the 2 corporations, which have co-produced a collection of films.
The conversations had been at a really early stage and there was no certainty they’d result in a deal, based on two educated sources. Different events had been additionally concerned about buying a few of Paramount’s belongings, they added.
Skydance was notably concerned about Paramount’s Hollywood studio, sources accustomed to the New York-based firm mentioned. However different belongings, together with TV networks reminiscent of CBS and its lossmaking streaming platform Paramount Plus, could possibly be acquired after which offered to different potential patrons.
A spokesman for Skydance declined to remark. RedBird didn’t reply to a request for remark.
Based in 2010 by David Ellison, son of billionaire Oracle co-founder Larry Ellison, Skydance has co-produced various blockbusters with Paramount, together with the Tom Cruise automobiles Top Gun and the Mission: Unimaginable movies. Their subsequent Mission: Unimaginable movie is due out in cinemas in 2025.
The Ellison household is the most important shareholder in Skydance, which might have little hassle elevating capital for a deal. In October 2022, Skydance’s valuation jumped to $4bn following a cash injection of $400mn led by RedBird, together with the Ellison household, KKR and Tencent.
Paramount additionally obtained a lift in 2022 when Warren Buffett disclosed that he had bought a stake of about 75mn shares at $28 per share — nicely above the place they stand as we speak.
However the shares have risen 39 per cent over the previous month as hypothesis mounted that the corporate was exploring a sale. The inventory rose 12 per cent to $16.85 on Friday.
Redstone has lengthy mentioned the corporate, whose roots lie in a drive-in cinema enterprise based by her grandfather, was not on the market. However final month Paramount’s board of administrators accredited “golden parachute” compensation for chief govt Bob Bakish and different senior executives, prompting hypothesis that she was open to gives.
Like different massive, diversified studios, Paramount’s conventional TV enterprise is in decline and its streaming enterprise has misplaced billions.
Wealthy Greenfield, an analyst at LightShed Companions, mentioned in a latest analysis observe that Paramount confronted a “very tough future”.
“Whether or not or not . . . Shari Redstone needs to promote, we have now a tough time seeing how a sale in complete or in items isn’t Paramount’s final destiny,” he wrote.
However he added that he anticipated Redstone to take different steps earlier than promoting the studio, together with reducing prices, dramatically scaling again its ambitions for Paramount Plus and growing licensing offers with different streamers.