A month ago Paramount Global and Skydance Media entered into exclusive talks for a complicated merger that would see the home of Star Trek under new management. That exclusive window ends today without a deal and it appears one isn’t coming, and a competing bid from Sony (backed by Apollo) is also reportedly a non-starter.
Paramount may go it alone for now
It has been a tumultuous week for Paramount Global. As the week began it appeared that the long-gestating deal with Skydance was starting to come together starting with a final offer presented last Sunday. A big complication was coming from Apollo, the private equity firm that had previously made an offer for Paramount. Apollo has since partnered with Sony for a deal more attractive to Wall Street for the immediate premium it would deliver to shareholders. But Shari Redstone (who controls the important voting shares) still preferred working with Skydance, even though that deal would be more complicated, without being a big benefit to regular shareholders in the short term. There was disagreement within Paramount over which way to go. CEO Bob Bakish was pushed out on Monday due to clashing with Redstone over the Skydance deal. Things got even more complicated Thursday when Sony and Apollo upped their offer to $26 Billion in cash.
Now on Friday, as the exclusive window with Skydance is set to close at midnight, Variety is reporting the deal is “falling apart.” CNBC added reporting that the board overseeing the bids will not be extending the talks with Skydance. The various reports agree that things are not final and something could still happen with Skydance. According to The Hollywood Reporter, “Paramount’s special board committee appears to have cooled on the offer,” however a source says talks “continue.”
Even if the deal with Skydance doesn’t materialize, that does not necessarily mean the Sony/Apollo deal will go forward. According to Variety While the committee will consider the offer (as they are required to do), the regulatory hurdles are considered a “deal breaker.” Redstone is also reportedly against the Sony deal as it would almost certainly see Paramount Global broken up, essentially becoming a brand within Sony’s portfolio. So, at least in the short term, Paramount appears ready to “go it alone” as noted by media analyst Rich Greenfield.
It is way too early to say what impact any of this will have on Star Trek, except that things should be business as usual in the short term. But a financially struggling Paramount saddled with debt and a junk-level borrowing rating will continue to look for cost cutting across the board. We have already seen how this belt-tightening has impacted the Trek franchise, but it’s likely there will be more ripple effects until the parent company rights the ship.
As always, TrekMovie will monitor Paramount’s business affairs and offer reports on significant developments.
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