The stock of Paramount falls after Shari Redstone kills the Skydance deal.
As a result of allegations that controlling shareholder Shari Redstone had terminated months-long merger discussions with Skydance Media, Paramount Global (PARA) was unable to participate in a CPI-fueled market surge on Wednesday. This came a day after the stock had fallen because of the claims.
The Wall Street Journal was the first to announce the decision, which was made only a few minutes before a committee of Paramount directors was supposed to vote on the planned merger.
The two sides had reached a consensus on the financial parameters of the transaction; but, they were unable to reach a consensus on whether or not to seek the permission of shareholders who did not control the company, as reported by the Journal. Redstone, who is not the biggest shareholder in Paramount but does possess a controlling stake in the show via her family’s holding firm National Amusements, lobbied for the merger to be put to a vote in order to eliminate the possibility of legal action being taken against it. Skydance is said to have put up a fight.
After a Protracted Effort, Skydance has finally made a decision to acquire Paramount.
Skydance and its private equity partner, RedBird Capital, have been working for some months to purchase the illustrious Hollywood company, and this decision represents the conclusion of their extensive efforts. At a time when Paramount has been struggling to adapt to the streaming world, slipping behind pioneers such as Netflix (NFLX) and deep-pocketed internet corporations experimenting in entertainment such as Apple (AAPL) and Amazon (AMZN), the partnership with Skydance was considered by many as a lifeline for the company.
Throughout the course of this year, Paramount has been inundated with purchase proposals from a variety of entities, including the private equity behemoth Apollo Global Management (APO) and the media magnate Byron Allen.
It has been reported by the Journal that Redstone is now planning to investigate the possibility of selling National Amusements alone rather than combining Paramount with another organization.
As of 11:30 a.m. Eastern Time on Wednesday, shares of Paramount had not moved significant since the previous day, when they had dropped over 8% in response to the Journal article. As at this point in the year, the stock has lost a quarter of its value.
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