As Paramount, the media company that is home to the “Top Gun” franchise and Nickelodeon, was finalizing exclusive talks to sell itself to media company Skydance, another suitor emerged.
Apollo Global Management, the investment firm, told Paramount over the weekend that it was interested in buying the entire company for more than $26 billion, including the value of Paramount’s debt, according to two people with knowledge of the matter. It had previously made an $11 billion bid to acquire the Paramount film studio alone. (Paramount also owns CBS as well as other cable networks.)
Paramount decided not to pursue the Apollo sequel, the people said, with one person explaining that doing so could have derailed its advanced negotiations with Skydance, which became exclusive this week.
Apollo’s bid would be subject to due diligence, which would take time, one of the people said. Apollo said in a letter to Paramount that it is interested in buying out all of the company’s shareholders in cash, which could be tempting as the board tries to strike a deal that doesn’t just please Shari Redstone, who controls Paramount , but also the common shareholders of the company. .
The Wall Street Journal earlier reported on Apollo’s interest in Paramount.
The deal currently being discussed with Skydance would involve buying National Amusements, the company that owns Ms. Redstone’s voting stock in Paramount, and merging Skydance with Paramount. While Ms Redstone is keen to reach a deal, it is subject to approval by Paramount’s board, which has been mulling her options with the help of advisers for weeks.
Late last month, David Ellison, the technical adviser who founded Skydance, met with a committee of Paramount’s board to discuss his vision for a deal, according to two people familiar with the talks. Paramount’s stock has fallen 18% since the start of the year amid headwinds for the media industry. It has a market value of about $9.4 billion and about $15 billion in long-term debt outstanding.
The company trades at a deep discount to the combined value of Viacom and CBS, which merged to form Paramount in 2019. Paramount+ is still losing money, but its losses have slowed and it continues to add subscribers.
Ratings agency S&P Global downgraded Paramount’s debt to junk last week, citing “accelerating declines” in its traditional TV business and continued uncertainty in its push into streaming. Some analysts said the downgrade could make it easier to acquire Paramount, as it could bypass a provision that would have required the buyer to pay off the company’s debt immediately.
