Joint Bid

Sony Pictures Entertainment and Apollo Global Management are in discussions regarding a potential joint bid for Paramount Global, according to reports from the New York Times and sources familiar with the matter. While the conversations are ongoing, several challenges must be addressed before a formal offer can be made. Apollo Global Management had previously considered solo bids for Paramount Global, including a $26 billion offer and an $11 billion offer for the Paramount Pictures film studio. However, Paramount Global is currently engaged in exclusive negotiations with Skydance Media, exploring a merger that would integrate Paramount into Skydance under the leadership of Skydance CEO David Ellison. Paramount Global has established a special committee to evaluate offers and options, expressing reservations about Apollo’s bids due to concerns about regulatory approval and the potential impact of a financial buyer on the company’s assets. The proposed joint bid between Sony and Apollo entails Sony Corp. contributing Sony Pictures Entertainment to the joint venture, with both parties providing cash to facilitate the transaction. Sony would emerge as the majority owner of the combined entity, which would also include CBS. However, structuring the deal would require careful consideration, particularly regarding FCC regulations concerning foreign ownership of broadcast TV stations, given CBS’s ownership of 28 TV stations. While a representative for Apollo has yet to comment on the discussions, a Sony spokesman declined to provide further details. If successful, the partnership between Sony and Apollo would mark a significant shift for Sony Corp., which has maintained a Hollywood presence for over three decades. This potential move comes amid ongoing speculation about Sony’s commitment to its Hollywood investment. Meanwhile, the Skydance scenario involves keeping Paramount Global as a publicly traded entity, with Skydance and RedBird Capital Partners injecting capital to alleviate its substantial debt burden. The transaction would also usher in a change in leadership, with David Ellison assuming the role of CEO. However, concerns have been raised by some shareholders regarding the potential enrichment of controlling shareholder Shari Redstone in the Skydance deal. Skydance and RedBird are reportedly planning a roadshow to garner support from common shareholders, although the addition of Sony to the negotiations may complicate matters.