The Key Merger with Skydance is back under new terms following the collapse of negotiations
Independent film and TV producer Skydance Media has reached an initial agreement to buy National Amusements Inc. of Shari Redstone and merged with Paramount Global, the parent of CBS and MTV, according to a person with knowledge of the matter.
National Amusements, the family company that controls Paramount, will refer the deal to a special committee of Paramount directors for review, said the person, who asked not to be identified discussing the unannounced deal.
The deal follows the collapse of talks between Skydance and National Amusements last month. The two got engaged again last week, and talks intensified on Tuesday, the person said.
The new terms include a higher rating for National Entertainment and stronger language indemnifying the Redstones company against potential lawsuits from the deal, the person said. Sellers have 45 days to seek better offers, said one person familiar with the matter.
Paramount and Skydance, led by the founder of Oracle Corp. Larry Ellison’s son, David Ellison, declined to comment. National Entertainment did not respond to inquiries. The Wall Street Journal reported on the deal earlier Tuesday, saying the terms of the deal were not yet known.
A deal could be announced within days, the person said, although it is still possible the deal could collapse.
Paramount’s non-voting shares rose as much as 10% to $11.83 in extended trading.
As part of the deal Ellison had previously proposed, he and his partners, including RedBird Capital Partners and KKR & Co., offered to buy National Entertainment for $2.25 billion and put $1.5 billion on Paramount’s balance sheet to pay off debt. The film and TV company’s long-term debt exceeds $14 billion.
Ellison’s group would contribute $4.5 billion in additional cash to buy back Core shares. Up to 50% of Paramount’s non-voting Class B shareholders would receive $15 a share and all non-Redstone Class A family shareholders would receive $23 a share, people familiar with the negotiations said at the time.
The investment represents a major lifeline for Paramount, which has struggled to compete as consumers abandon movie theaters and cable TV in favor of broadcast.
The company lost a total of $554 million, or 87 cents per share, in the first quarter.
Earlier on Tuesday, Bloomberg News reported that Paramount is in exclusive talks to sell its Black Entertainment Television network to buyers that include BET Chief Executive Officer Scott Mills and Chinh Chu, who heads New York private equity firm CC Capital.
The group was discussing an offer of $1.6 billion to $1.7 billion, according to people with knowledge of the matter who asked not to be identified citing non-public information.
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