The partnership has yet to formally submit an official offer, as there are a number of obstacles that need to be hashed out. The deal however, would boost Apollo’s efforts in acquiring a deal.
Apollo previously floated a $26 billion offer on its own that was reportedly dismissed, and prior to that offered $11 billion for the Paramount Pictures film studio.
Those deals were inclusive of equity and debt, and teaming up with SONY would take cash or financing concerns out of the equation for Apollo.
The joint venture would take Paramount Global private and SONY would take the lead becoming the majority stake owner with Apollo holding the minority. This would also give SONY ownership of its library of films, including blockbuster franchises such as, “Star Trek,” “Mission: Impossible,” and “Indiana Jones.”
However, CBS being part of the enlarged entity of Paramount could put SONY under scrutiny, as certain Federal Communications Commission (FCC) regulations restrict foreign ownership of U.S. broadcast stations. To make this situation work, CBS would have to be sold or licensed to Apollo.
It has been met with criticism however, as some of Paramount’s investors say the structure of the deal leaves them at a disadvantage. They fear Apollo being a financial buyer would prove less benevolent for challenging assets rather than focusing on growing the overall business.
This all comes, as Paramount has seen a loss of over $16 billion in value since being formed through the reunion of CBS and Viacom back in 2019.
Its streaming service Paramount+ has been unprofitable despite reporting subscriber growth.
Competition Ventures
The Japanese conglomerate (SONY) and the U.S. asset management company (Apollo) are required, however, to hold off for an exclusive 30-day negotiation period as another potential buyer group eyes the company.Paramount’s independent board of directors has extended that time to Skydance Media and Redbird Capital, with the negotiation window set to end in early May.
Skydance and Paramount are trying to work out a deal that would bring in new management and merge the two. Skydance is offering to buy Paramount’s shareholder “Redstone’s National Amusements,” which controls 77 percent of the company’s voting stock.
National Amusements Inc., which is run by Shari Redstone, holds about 10 percent of Paramount’s equity. Meaning, a deal for them risks diluting other shareholders.
Despite this, Paramount would remain a public company and plans to deliver operating efficiencies. Additionally, Skydance would give Paramount an influx of capital that would chip away at its considerable $14.5 billion debt.
Getting in line and expressing their interest as well are Warner Bros. Discovery, and Allen Media Group. While the pursuit of a deal with Warner Bros. Discovery was short-lived, and did not progress beyond initial high-level talks; Allen Media Group is said to reportedly still be interested.
The Epoch Times has reached out to SONY, Apollo, and Paramount for comment.
