National Amusements Inc., the Redstone family holding company that owns a controlling interest in Paramount Global, said Tuesday it will not be doing a deal with Skydance Media after all.
The company statement said that Shari Redstone and National Amusements “have not been able to reach mutually acceptable terms regarding the potential transaction with Skydance Media for the acquisition of a controlling stake in NAI.”
Paramount's publicly held Class B stock closed Tuesday down almost 8% at $11.04 a share. The shares lost another 1.6% in after-hours trading.
The statement said Paramount expected to continue to work with Skydance.
Skydance is run by David Ellison, son of billionaire Larry Ellison, and produces Tom Cruise’s Top Gun and Mission Impossible films, which are distributed by Paramount.
Skydance had proposed buying Redstone’s controlling stake at a premium. Eventually it put forward a plan to buy some of Paramount’s public shareholders stock as well, but that deal seemed headed for court with a raft of shareholder suits.
In its statement NAI said it now “supports the recently announced strategic plan being executed by Paramount’s Office of the CEO as well as their ongoing work and that of the company’s board of directors to continue to explore opportunities to drive value creation for all Paramount shareholders.”
But other suitors for Paramount have emerged, despite its high debt load, money losing streaming business and a large traditional TV business that is shedding subscribers.
Most recently there have been reports that Edgar Bronfman Jr. and Bain Capital are considering offering $2.5 billion for National Amusements. Sony Pictures and Apollo Global Management were also considering a bid for Paramount.
“It seems Shari Redstone has decided to go with Door #3 in the Monty Hall problem,” said analyst Robert Fishman of MoffettNathanson.
“Ms. Redstone now seems set on either continuing the status quo or divesting herself of just her NAI stake, handing over the reins of her family’s empire to new stewards without delving into any broader or more complicated plan that would involve other media companies or shareholders,” Fishman said.
