Skydance Offers Paramount a Deal Sweetener: A $3 Billion Cash Infusion

 Title: Skydance Offers Enhanced Deal to Merge with Paramount, Easing Investor Concerns

With the future of Paramount in flux, its leading potential acquirer has raised the stakes.

Skydance, engaged in merger talks with Paramount for several months, recently proposed injecting $3 billion in cash into the combined entity. This capital infusion would be earmarked for debt reduction and stock buybacks, as per sources familiar with the matter. Moreover, Skydance has sweetened the deal by offering Paramount shareholders a larger stake in the merged company compared to its initial offer.

The revised bid aims to address concerns voiced by investors in recent weeks, who fear that the proposed merger could disproportionately benefit Shari Redstone, Paramount's controlling shareholder, at the expense of other investors.

Despite this improved offer, the complex nature of the transaction and the resistance from some investors mean that the success of the Skydance deal is not assured. Discussions within Paramount's special committee have touched upon potentially conditioning the deal on approval from a majority of minority shareholders.

The negotiations between Paramount and Skydance have been ongoing since late last year when Shari Redstone signaled her willingness to explore a sale of her media empire. Various suitors, including private-equity giant Apollo, have expressed interest in Paramount alongside Skydance, which advocates for a merger.

Skydance's proposal involves purchasing Paramount shareholders' stock at a premium, with the intention of further appeasing investors. Notably, Shari Redstone was already slated to receive a premium for her shares due to her controlling stake. One option under consideration involves Skydance requesting Redstone to accept a reduced cash payout in exchange for retaining more equity in Paramount.