Skydance puts a revised offer on the table for Paramount

Updated with revised SkyDance offer details: Skydance's offer to Paramount, which Deadline has learned is its last and final, involves a sweet $3 billion cash infusion — at least $1 billion previously thought to be a priority for Paramount to have enough cash on its balance sheet for investment-grade status with major rating agencies.

The deal also includes a premium sweetening of one percent of non-voting Class B shares, though the details are unclear. Shari Redstone will take an unspecified haircut compared to the initial contract terms below. Paramount plans an all-stock acquisition of Skydance as the second step in the transaction, which would be valued at approximately $5 billion.

It's not clear what happens to some of the other Class A shareholders beyond Redstone, but most hold B shares, as does Mario Capelli. Class A stock has voting rights (and Redstone owns the majority of them). There is no more common Class B stock.

NAI, Redstone's family holding company, demanded a revised Skydance offer that included more equal treatment for shareholders beyond Shari Redstone after investors raised an uproar. A person familiar with the new offer says it meets and exceeds all NAI's demands.

Investors are not yet expecting a wholesale takeover of Paramount by Sony and Apollo because Redstone doesn't want to break up the company, the person said. That deal could be dragged down by regulatory issues.

Representatives for Redstone/NAI and Paramount's special committee of directors evaluating the deal were not immediately available for comment.

Before: David Ellison's Skydance has made a revised offer to take control of the company to a special committee of Paramount Global's board, Deadline has learned. Terms are not immediately available, story will be updated when they are. The new plan is designed to make a deal more palatable to Paramount investors beyond controlling shareholder Shari Redstone, which his family firm NAI had sought.

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Redstone controls Paramount through NAI or National Amusements.

The offer is the best and last-minute, one-month exclusive negotiating window between the two sides that ends on May 3, though it could be extended. The departure of Paramount CEO Bob Bakish comes amid the Bakish watch, which is expected to be announced today, with three division heads now set to replace him. The news was expected before the market opened this morning, but was delayed, and it's not clear why, but it's complicated.

Paramount has two classes of shares. Skydance initially offered to buy Redstone's controlling Class A voting shares and certain other assets for about $2 billion. Paramount would later buy Skydance in an all-stock deal valued at $4-$5 billion. Bar will be a publicly traded company. Skydance will inject new capital into Paramount, which is welcome given its heavy debt load.

Most investors own non-voting Class B shares and have been publicly and privately trashing the deal for months. $2 billion is the best price for Redstone's stock, meaning a premium buyout for her but not for them. The issuance of new shares to merge Skydance will dilute their holdings. Investors have threatened to sue. Some, like Mari Capelli, hold voting shares, but the deal will still be done over their heads.

Whether or not the shareholders had concrete legal cases, the lawsuits were not welcome and the level of dissatisfaction was sufficient for NAI to demand revised contract terms.

It is almost impossible for any offer to satisfy everyone, the investor said. This includes skydance boning to oust other Class A shareholders, but B holders may still be angry about that. Skydance may take some small percentage of B shares for a premium. Agree to put a lower dollar figure on the link. But a joint offer by Sony and private equity firm Apollo — which would buy out all shareholders and take the company private — is the only way to stop the clamor. The partners are yet to make a formal offer and Skydance is awaiting the outcome of negotiations. Redstone doesn't seem to like the option, which is said to be around $26 billion, but they could be reduced in due diligence if both parties go that far.

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Adding to the drama, Paramount will report its latest quarterly earnings after the market closes today. CEOs typically hold calls with the analyst community after the numbers. Bakish didn't expect it. A lot more to come

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