The shares of entertainment and media giant Paramount Global plummeted 7% on Tuesday after the proposed merger with production firm Skydance Media became imminent.
Paramount’s special committee released a statement that confirmed that the “go-shop” period has officially ended and that the deal with Skydance remains their preferred choice.
“Having thoroughly explored actionable opportunities for Paramount over nearly eight months, our Special Committee continues to believe that the transaction we have agreed with Skydance delivers immediate value and the potential for continued participation in value creation in a rapidly evolving industry landscape,” Charles Phillips, chair of Paramount’s special committee, said in a statement.
Skydance Media previously agreed to a deal that would see it acquire National Amusements, which is the controlling shareholder of Paramount, and then execute a merger with Paramount. The agreement, already approved by Paramount’s special committee, is valued at $8 billion and includes a $6 billion cash injection.
After the approval of the Skydance merger, Paramount received a “go-shop” period in which it had the opportunity to search for a better deal. One of the offers that came Paramount’s way was from FuboTV chairman Edgar Bronfman, who offered $6 billion for National Amusements and a minority stake in Paramount through all-cash transaction.
However, Bronfman ended up withdrawing its offer earlier this week after it became clear he would not get the approval of Paramount’s special committee. Additionally, reports indicate that Bronfman had trouble financing the deal.