The recent series of merger proposals received by American Hollywood giant Paramount Global has caused a huge shock in the film and television industry. On Saturday, May 4th local time, a special committee of Paramount held a meeting to evaluate external bids from the company.
Last Wednesday (May 1st), Sony Pictures Entertainment and private equity giant Apollo issued a $26 billion all cash acquisition proposal to Paramount Global. This bid far exceeds the market value of Paramount and can almost buy three Paramount. As of the close of last Friday, Paramount's market value is approximately 8.98 billion US dollars.
The joint offer from Sony and Apollo coincides with the final stage of negotiations between Paramount and Skydance Media. In April, Paramount and Skydance Media became the exclusive negotiation window for a period of 30 days, with a deadline of last Friday (May 3rd).
From the current results, it appears that Paramount and Skydance Media have not reached an agreement, which means that Paramount and its controlling shareholder Shari Redstone can consider other acquisition offers.
According to media reports on Sunday (May 5th), the Paramount Special Committee has started negotiating a deal with Sony and Apollo. This bid may push Apollo to hold a broadcasting license for CBS.
However, Skydance Media has not lost the opportunity, and Paramount's committee is also pushing for further negotiations with Skydance.
Difficult situation
In 2019, two media giants in the United States, CBS, and Viacom, reached an agreement to conduct a full stock merger, renaming the merged company Paramount Global.
Paramount has CBS, Nickelodeon, and other cable television networks. However, in recent years, the advertising market has been weak, and cable TV subscriptions in the United States have declined, all of which have eroded the profits of its television business.
As one of the eight major Hollywood brands, its film studio has produced classic films such as The Godfather, Mission Impossible, and Star Trek. However, the months long strike by Hollywood screenwriters and actors last year severely damaged the morale of film companies, including Paramount, who has been trying to recover from the downturn.
Paramount+, Paramount's streaming service, also lags behind competitors such as Netflix and Disney+in terms of user numbers.
Since the merger of Paramount in 2019, its stock price has fallen by more than 65%, resulting in a market value loss of over 14 billion US dollars.