Shari Redstone ended negotiations with David Ellison's Skydance over a potential deal for Paramount.
After days of ongoing speculations about the fate of Paramount Global, and more than 6 months of challenging negotiations, the heiress abruptly called off discussions with David Ellison's Skydance Media, taking the industry by surprise and raising concerns about the future of her family-run media company.
The negotiation fell apart at the final stage. As Paramount's special board was about to vote on the deal, National Amusements Inc., the Redstone holding company, informed them that the heiress has decided to put a halt to the merger deliberations, according to CNN sources.
It's still unclear why the deal was ultimately rejected by Redstone. Was she upset by the new financials of the offer? Was she fearful of shareholder litigation? Is her family legacy at play? Or is Redstone just not willing to release her grip on the empire her father, Sumner, built?
The response to this scenario is subject to debate, with each side arguing different points of view.
One perspective gaining ground is that, while the two sides had agreed on the financial terms, there were still disputes they weren't able to find common ground on. The most contentious issue was whether the deal should be subject to a majority of minority shareholders' approval. Redstone insisted on this condition to safeguard against potential lawsuits, while Skydance opposed it.
"That was a crucial term," a source informed CNN.
The other account paints Skydance as a cooperative partner who had repeatedly improved the deal terms and met all the financial necessities for it to take place following several agonizing months of negotiations. In this version of events, the actual reason the deal didn't conclude was because Redstone, guided by Ellison adversary Charles Phillips, simply became frightened.
"Shari became anxious," one person directly told CNN.
No matter the reason, the deal is no longer materializing, and debating the rationale behind its failure to cross the finish line doesn't alter its ultimate fate. Rather, it underscores the growing friction between the two parties as they endeavored to forge a union.
In the months leading up to this decision, the negotiations cost several top names. Bob Bakish was let go as CEO of Paramount Global, and four directors resigned from the company's board. Critics had likened this corporate drama to a real-life version of "Succession."
NAI, who are now considering potential alternative offers, issued a statement Tuesday in support of the Office of the CEO at Paramount Global, consisting of Brian Robbins, George Cheeks, and Chris McCarthy. This post-Bakish group unveiled a strategy for their company last week that includes exploring a joint streaming venture, creating synergies, and saving $500 million by cutting costs.
"NAI backs the ongoing efforts being executed by Paramount's CEO office, along with the Company's Board of Directors in exploring opportunities to enhance value for all Paramount shareholders," the family-owned business said in a statement.
NAI also revealed their commitment to maintaining their production partnership with Skydance. The two companies have collaborated on hits such as "Top Gun" and "Mission Impossible" in the past few years.
"At this phase, there was considerable uncertainty looming over the company," one source explained, highlighting that they wish to see the company move forward.
NAI affirmed their support for the CEOs' strategic planning and the Board's boardroom activities, as well as the continuous production connections between Paramount and Skydance.
"We look forward to the future productive cooperation between Paramount and Skydance," read the statement.
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The media widely reported on the sudden end of negotiations, raising questions about the future of the potential business partnership between Paramount and Skydance Media. The termination of the deal has also sparked discussions about the strategies of both parties in the media industry.
