Skydance, Paramount Exclusive Talks End; Sony, Apollo Deal On Table

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UPDATED with the latest news on merger negotiations with Paramount: A month-long exclusive negotiation window between Paramount Global and Skydance ended at midnight last night and was not renewed. But the David Ellison Company is still in the running as a special committee of Paramount’s board of directors meets today. The group is considering how to approach an all-cash offering that is very different from that of Sony and Apollo.

Deadline has learned that the committee could consider a so-called “go shop” provision, which would allow a public company to explore competing offers even if it already has a firm purchase offer in hand. The duration of a go-shop period is generally one to two months.

Par’s majority shareholder, Shari Redstone, favors a deal with Skydance, backed by Larry Ellison and Gerry Cardinale’s RedBird Capital, although other investors have hated it for more than a month, even a sweetened offer. That would leave the company public. Sony and Apollo have launched a preliminary offer of around $26 billion but have yet to get on the books.

Agents, managers and others in Hollywood fear a Par-Sony tie-up that, if passed by regulators, would reduce the number of big players for commercial projects and deals.

PREVIOUSLY: It’s midnight, the end of a month-long exclusive negotiating window between Paramount Global and Skydance Media. David Ellison’s company has been circling Paramount for months and has launched several bids to buy out Shari Redstone’s majority stake, backed by Oracle co-founder Larry Ellison and Gerry Cardinale’s RedBird Capital.

The Skydance team has spent the last month taking a close look at the books. In the face of vocal objections from other Paramount shareholders to the initial structure of the deal, this sweetened the situation for common stock owners. The revised offer is considered Skydance’s best and last (even though it was still rejected by other investors).

The timing was tight to conclude a deal within a month, but there had been talk of a possible extension. It’s unclear if this happens now, it may be unlikely, as Paramount now has another offer on the table from a team from Sony Pictures Entertainment and private equity giant Apollo . After waiting a bit, the partners formally requested to discuss a cash deal potentially worth $26 billion. They must always do their due diligence.

Paramount had set up a special board committee to explore offers. He can receive and acknowledge another offer during an exclusive window, but he cannot interact with the other party. Skydance should therefore calm down a little while Paramount examines the other offer. The question is: will it wait or will he be released on bail?

Meanwhile, Paramount Global’s leadership abruptly changed earlier this week. Chief executive Bob Bakish left the company and was replaced by three division heads in a new CEO office. The company also declined to answer questions about its quarterly earnings call, a rare occurrence and the latest twist in an unpredictable journey at Paramount this year.

A deal with Sony would mean taking Paramount private as part of a merger of two major studios, a prospect unpopular in Hollywood because it would mean one less place to buy projects. It would also likely result in a split of the company since Sony of Japan cannot own broadcast assets in the United States. Skydance would keep it public, with a cash injection and restructuring.