Investing.com – Paramount Global's (NASDAQ:) blockbuster sale of David Ellison's Skydance Media may be at high risk of failing as Sony (NYSE:) and Apollo Global Management (NYSE:) are preparing to make a “much better offer that everyone will benefit from.” Shareholders of the company,” an insider told Investing.com exclusively this morning.
As the clock ticks 30 day period Following exclusive talks between PARA and Skydance, which end on May 3, insiders and analysts alike now believe the odds are that the entertainment giant's controlling shareholder, Shari Redstone, will be forced to weigh in on the Sony/Apollo proposal.
Last night, reports that the Japanese giant might team up with former presenter Apollo for such a show spread across the media, adding flame to the actually Complex deal.
The proposed offer would be “far better for all Paramount shareholders than the current offer from Skydance,” David Katz, president and CIO of Matrix Asset — an outspoken PARA shareholder — said after being consulted exclusively by Investing.com this morning. he also He added that the proposal could be worth up to $29 billion. “Apollo had a $26 billion offer, and the board wouldn't address it. However, now that they have teamed up with Sony, they have the financing for a better deal, which could eventually reach $28 or $29 billion if the board can convince investors of the true value of the company's assets.” Investment.com.
“We urge the board to give it close consideration, because based on speculation, the offer will be much more attractive and will provide economic benefit to all shareholders of the company,” David Katz, president and CEO of Matrix Asset's IT division, told Investing. .com.
He also added that with Sony in the picture, it would be very difficult for Shari Redstone, the company's major shareholder, to Keep following Only Skydance show. “An enthusiastic buyer like Sony would certainly have enough leverage to make an offer that would interest everyone involved in the company – Buyer included.”
“Aside from the financial aspect, this proposal would be very beneficial for Paramount's future growth since Sony and Apollo are very well-run companies – which is not quite the case for Skydance,” David said. He concluded: “We urge the Board of Directors to consider this offer quickly.”
The deal may fall through even without Sony's interest
This speculation comes amid growing distrust of the closure of the current Skydance show due to backlash from the side both of them Paramount's board of directors Important Shareholders of the company.
Led by legendary investor Mario Gabelli, Ariel Investments, and Matrix Asset Holdings, these shareholders claim that the deal will exclusively benefit Paramount's non-executive chairman, Shari Redstone, at the expense of shareholder dilution, especially among non-voting shareholders.
“The reported Skydance deal is fraught with litigation risk; it would have been difficult to execute even without (unsurprising) internal disputes,” Christopher Marangi, co-CEO of IT at Gabelli Funds, told Investing.com exclusively.
Jordan Posner, managing director of Matrix Asset, also expressed concerns to Investing.com, saying: “Ms. Redstone is only acting in what she believes is in her best interest, which may… Be colorful With it king financial situation, completely ignoring its impact or effects on other shareholders. In this case, to maximize her value, she feels very comfortable doing something That's a lot Dilutive to other shareholders.”
In reality, The backlash against the current show has been so rapid that it has already prompted four members to resign from Paramount's board, three of whom were part of the eight-person committee that evaluated a potential Skydance merger.
Cash Square co-founder Vijay Marulia says four board members leaving is not a good sign — it's a “no” vote for the Skydance deal.
warns Phil Alberstadt, managing director of Embarc Advisorsbut, The Skydance deal could still move forward through a series of acquisitions. “National Amusements could elect to sell its shares, either in whole or in part, to another party, such as Skydance, thereby transferring control of Paramount.”
Other bidders?
Despite the advanced talks, Gabelli's co-IT director believes Paramount has what it takes to get back on a growth path independently if necessary. “We are not committed to a sale – continuing as an independent entity with an accelerated turnaround plan is likely to create a bigger economic pie for all shareholders going forward,” he said, adding: “I would not be surprised if additional strategic information leaks.” and the buyer's financial interest in some or all of Paramount.”
Alberstat of Embarc Advisors also believes that if Skydance fails, There is a possibility that Another bidder will intervene. “I think there are other potential suitors on standby who are they Waiting to see if Skydance can close a deal within the current 30-day exclusivity negotiating period.”
Vijay Marulia believes Paramount may also be under the radar of celebrity investors. “The white knight could come at any time, think Bill Ackman or Daniel Loeb,” he said.
David Katz of Matrix Advisors adds that major technology companies with “entertainment aspirations” are also examining the deal. “There must be a full and open sales process to attract interest from all potential bidders, without assuming that some may/can It is excluded Because of preconceptions about potential regulatory objections (that can be overcome). this “Big tech companies with entertainment aspirations include (Apple (NASDAQ:), Amazon (NASDAQ:), Alphabet (NASDAQ:)) and other streaming companies.”
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