Shares of media giant Paramount (PARA) rose about 8% at the start of trading on Wednesday after The Wall Street Journal reported that the company and Skydance Media were again considering a merger.
Shari Redstone, who runs Paramount through her family’s holding company, National Amusements Inc. (NAI), closed merger talks with Skydance in June after months of negotiations.
According to the Wall Street Journal, the new proposed deal would see Skydance acquire National Amusements for $1.75 billion and then merge with Paramount, which owns a number of media assets including CBS, BET, Showtime and MTV, as well as its eponymous studio business and streaming platform.
The two sides also agreed to a 45-day “go-shop period” during which other bidders could submit bids.
“There’s just a whole lot of uncertainty” about the new deal, Geeta Ranganathan, a senior analyst at Bloomberg Intelligence, said in an interview with Yahoo Finance, adding that the terms are “not very clear at this point.”
But what’s more clear is that it would protect Redstone from threats of lawsuits from non-voting shareholders, a key reason the media mogul called off the deal last month.
“This agreement has significantly stronger indemnification provisions that appear to potentially protect her from a lot of future litigation,” Ranganathan said.
But as history shows, that doesn’t mean things are completely set in stone.
Skydance has previously worked with Paramount on popular film franchises such as “Mission: Impossible,” “Top Gun: Maverick” and “Transformers,” but has reportedly revised its acquisition proposal several times after non-voting shareholders expressed concerns about the terms of initial talks, which would have involved paying Redstone $2 billion in cash as the first step of the transaction.
The turmoil in the negotiations has been a heavy burden weighing on the entire company. Amid the turmoil, Paramount announced in late April that CEO Bob Bakish was stepping down after he reportedly clashed with Redstone over the Skydance deal. Bakish was then replaced by a consortium of three division heads known as the “Office of the CEO.”
