Shares of Paramount Global gave up some gains on Thursday after surging more than 15% yesterday as Skydance chief David Ellison secured pole position to clinch a majority stake of National Amusements.Led by Shari Redstone, National Amusements operates a movie theater circuit and also controls more than three-quarters of Paramount’s voting shares. A report in Bloomberg just prior to market close said a tentative deal was reached between Ellison, a longtime business partner on film and TV projects with Paramount, and Redstone. There is no deal done. But as Deadline reported earlier today, the two sides are in an exclusive negotiating period. Such an arrangement is only entered into with a framework in place, in the hope of reaching a final agreement.The two sides have established a 30-day exclusive negotiating window, Deadline has learned, a sign that things are moving forward more decisively after months of speculation. Paramount will not engage with other parties on a deal for 30 days.Reps for Skydance and Paramount both declined comment.Deal talk exploded in December when it first surfaced that Skydance was interested. David Zaslav’s Warner Bros Discovery was in the mix then too, and private equity giant Apollo Global has been in and out, most recently with an $11 billion bid for the Paramount studio followed, reportedly, by a $26 billion bid for the entire company. Redstone prefers the latter. Byron Allen made an offer for the whole company but that seems to have faded from sight.Paramount Global’s finances (debt, streaming losses, negative free cash flow) are less than stellar and it’s a smaller company than its main rivals at a complex time in the media business. CEO Bob Bakish has said the company will entertain all offers. Paramount did a big round of layoffs in February. It’s also been selling off non-core assets like book publisher Simon & Schuster and various real estate holdings. Efforts to shop a stake in BET Networks did not bear fruit and the company rebuffed offers to unload Showtime.Last week, big ratings agency S&P lowered the company’s bonds to junk status, cited the toll of ongoing pay-TV declines and the shift toward a more unproven streaming model.Paramount Global is controlled by National Amusements, the Redstone family holding company, which is in turn controlled by Shari Redstone.Ellison is backed by his deep-pocketed father, Oracle co-founder Larry Ellison, Gerry Cardinale’s RedBird Capital and KKR.The Skydance deal would require two steps, which is why it’s taking some time. First, the acquisition of Redstone’s stake in NAI, which would give Skydance control of Paramount Global. The second, more complicated, transaction would be merging the Skydance and Paramount studios. That’s the point of the deal, but they can’t just be jammed together even if Ellison controls them both, since Paramount Global is a publicly traded company with outside shareholders, including big names like Warren Buffett and Mario Gabelli. The merger would require approval by an independent committee of Paramount Global directors to ensure that it’s fair to all shareholders and could risk endless lawsuits if its not done right.
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