Shari Redstone Plays M&A War Games, Paramount CEO Fired | Wilnesh News

This could very well be the plot of HBO’s hit show Succession, Paramount Worldwide Plans on Monday to replace Chief Executive Officer Bob Bakish with a slate of existing department heads are a game-changing move aimed at accelerating the company’s future growth in some way.

Paramount is expected to announce Bakish’s departure before it reports earnings on Monday, which will be released after the market close, according to people familiar with the matter.

Paramount Global has decided to oust Bakish as CEO as it nears a merger agreement with Skydance Media. His departure could help push for a deal.

A number of large ordinary shareholders, including Gamco InvestorsAriel Investments, Matrix and aspen sky trust Publicly criticized the deal, arguing that it undermined common shareholder value. Skydance’s takeover bid would include billions of dollars in new equity, which would dilute common shareholders.

At the same time, according to previous reports by CNBC, Skydance will pay controlling shareholder Shari Redstone approximately US$2 billion for her 77% voting shares in the company through the acquisition of her holding company National Amusements. This is a big deal for Redstone. A huge premium because her financial interest in the company has dropped to less than $1 billion.

This imbalance led many at Paramount, including Bakish, to speak out against the deal, which they believed would only benefit Redstone.

“Without a doubt, I would rather see no sales,” said Gamco Chairman and Chief Executive Mario Gabelli. told the New York Post earlier this month.

Redstone is now willing to hold a so-called “minority majority” vote on the Skydance deal, according to a person familiar with his thinking. Burundi and wall street journal The developments were first reported on Sunday.

This was a major turn in the negotiations for Skydance. This means minority shareholders will now have a say in whether the deal goes ahead, allowing opponents of the deal to influence the outcome. Paramount Global shares rose about 5% in premarket trading on Monday.

Typically, Paramount Worldwide shareholders such as Gabelli would compare a takeover offer to the prospects of a standalone company, so he commented that no sale was in sight.

But by ousting Bakish, Redstone and the Paramount Worldwide board have now thrown the status quo into chaos. The company will no longer have a leader or a clear strategy moving forward. Redstone may be trying to force ordinary shareholders to sell by effectively destabilizing the company.

Exclusive negotiations with Skydance will end on May 3.

“National Amusements specifically requested that Paramount’s board of directors establish a special committee to exercise independent judgment when considering a potential transaction with Skydance,” a National Amusements spokesperson said in a statement provided to CNBC. There was no role for the committee and we respect the committee’s process and final decision as to whether the Skydance deal is an attractive deal for Paramount and whether they want to move forward.”

After receiving a majority minority vote, Skydance plans to increase its offer to make it more attractive to ordinary holders, Bloomberg reports. It’s unclear whether the company will be able to change the terms significantly enough to convince ordinary investors to change their minds.

If investors don’t want Skydance and there are no viable non-sale options, a joint bid by private equity firms Apollo Global and Sony could become a white knight.New York Times report The two sides held preliminary talks on reaching a deal earlier this month.

Shareholders will wait to see whether the two parties make a formal offer and detail who will fund the takeover. Regulators may view Apollo and Sony’s acquisitions as a greater risk if funding is provided by foreign entities. Sony is also a non-U.S. company, which could theoretically raise concerns with the Committee on Foreign Investment in the United States, which could delay its review.

Paramount, meanwhile, will reach a major carriage renewal deal with US cable company Charter Communications in the coming days. Bakish has been in advanced negotiations with Charter. It’s unclear how his ouster will impact those talks, which will play a role in the company’s future valuation.