New York Post: Paramount board takes steps toward sale as Byron Allen submits $14B buyout bid

Story from New York Post:

Paramount has taken initial steps toward a possible sale of the entertainment giant – even as media mogul Byron Allen submitted $14 billion buyout bid, The Post has learned.

The company’s board has formed an independent committee outside of Shari Redstone — the media heiress who owns a controlling stake in Paramount — to consider strategic alternatives including a possible auction of the company, two sources close to the situation said.

The board’s move comes as comedian-turned-investor Allen, who also owns the Weather Channel, said he made a $14.3 billion offer to buy all of the outstanding shares of Paramount Global. The firm also offered to assume Paramount’s $15.6 billion in debt.

Shares of Paramount Global — which in addition to its namesake movie studio owns CBS and cable networks including MTV, BET, Nickelodeon and Comedy Central — rose more than 6% Wednesday.

Nevertheless, some were skeptical whether Allen’s bid will result in a deal.

Sources close to the situation said Paramount Global hasn’t yet responded to Allen’s overture.

“I like the fact Byron is offering all Paramount shareholders a premium,” legendary investor Mario Gabelli told The Post on Wednesday. “But show me the money. You don’t know where Byron is getting the money from.”

Gabelli, who owns a stake in National Amusements — the holding company that controls Paramount with an 80% voting stake — added that he couldn’t confirm specifically whether Paramount had formed an independent committee to explore strategic alternatives.

“I’m fairly optimistic something is going on,” Gabelli said. “I think the timing of Byron’s bid is fine.”

If Allen manages to buy the company, he plans to sell the Paramount film studio, real estate and other intellectual property while keeping the TV properties, including its Paramount+ streaming service, and run them on a more cost-efficient basis, according to a source briefed on Allen’s plans.

“We believe this $30 billion offer, which includes debt and equity, is the best solution for all of the Paramount Global shareholders, and the bid should be taken seriously and pursued,” Allen Media Group said in a Wednesday statement.

Allen has been fishing for a big acquisition in TV for the past few years but has yet to close a deal.

He made a $10 billion bid for Disney-owned ABC Television as well as an $8.5 offer for TV station owner Tegna.

Allen also tried to buy Black Entertainment Television for $3.5 billion.

In response to skepticism about whether Allen has the financing, a source said Allen has arranged a loan against the studio’s real estate worth roughly $3 billion.

As reported by The Post, Redstone earlier this month quietly launched a formal auction of National Amusements.

Among the prospective bidders who have been sent nondisclosure agreements to view Paramount’s financials is Apollo Global Management, a source said.

Also among the prospective bidders for National Amusements is Skydance, the studio headed by David Ellison that co-produced “Top Gun: Maverick” with Paramount, sources told The Post.

Redstone and Skydance are “close on price” when it comes to National Amusements, according to a source close to the situation. The source added, however, that Skydance would require an agreement to buy Paramount Pictures as well and that would require Paramount Board’s approval in order to seal the deal.

Indeed, Redstone also “would prefer to sell all of it instead of just the holding company,” a source close to Redstone told The Post earlier this month, fretting at the time that “there might not be a bid out there.”

Ellison, CEO of Skydance Media and the son of Oracle founder Larry Ellison, made his preliminary offer to buy National Amusements, the holding company of the Redstone family, as a way to take control of Paramount Pictures, a source close to the situation said.

The debt-laden entertainment giant will begin slashing hundreds of jobs in February, Deadline reported earlier this month.

The news follows a Wall Street Journal report in December that the company was mulling the potential elimination of more than 1,000 jobs in early 2024 to trim costs.

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