Deadline has learned that Skydance’s offer for Paramount, said to be its last and final, includes a sweetened $3 billion cash in injection — up by at least $1 billion contemplated previously. That’s key as a priority is Paramount holding enough cash on its balance sheet for an investment grade status with big ratings agencies.The deal also includes a premium sweetener for a percentage of non-voting Class B shares, although details of that aren’t clear. Shari Redstone would take an unspecified haircut compared with the initial deal terms, below. Paramount’s all stock acquisition of Skydance, planned as a second step in the transaction, wouldn’t change, with a value remaining at about $5 billion.It’s not clear what happens to the few other Class A shareholders beyond Redstone, but most, like Mario Gabelli, also hold B shares. Class A share have voting rights (and Redstone owns most of them). The more widely held Class B share don’t.A special committee of Paramount’s board has been tasked with evaluating all offers and there’s clearly been some pressure for an agreement that gives more to common shareholders and less to Shari Redstone. A person familiar with the revised Skydance offer says it meets and exceeds concerns that have been raised.The person also insists that investors still hoping for a full takeout of Paramount by Sony and Apollo — and most are — should not because Redstone does not want to break the company up. A deal like that would also be dogged by regulatory issues, although not necessarily insurmountable ones.Reps for the special committee and for Redstone/NAI weren’t immediately available to comment.There is initial grumbling that the premium for common shareholders would be too small and the dilution too great to make a new offer like this attractive to common shareholders. But a few said that Jeff Shell coming on (he would be president to Ellison’s CEO) would be a plus.David Ellison’s Skydance has presented Paramount Global board’s special committee with a revised offer to take control of the company, Deadline has learned. Terms weren’t immediately available, story will be updated when they are. The new proposal is likely designed to make a deal more palatable to Paramount investors beyond controlling shareholder Shari Redstone, something that her family holding company NAI had requested.Redstone controls Paramount through NAI, or National Amusements.The offer, said to be the best and last, comes as a one-month exclusive negotiating window between the two parties is set to end May 3, although it could be extended. It also comes amid Bakish watch — with the departure of Paramount CEO Bob Bakish still expected to be announced today, with a trio of division heads set to replace him for now. The news was anticipated before the market opened this morning but is late, not clear why, but it is complicated.Paramount has two classes of stock. Skydance had initially proposed to buy out Redstone’s controlling Class A voting shares and some other assets for about $2 billion. Paramount was then going to acquire Skydance in an all-stock deal worth toward the upper end of $4-$5 billion. Par would remain a publicly traded company. Skydance would inject fresh capital into Paramount, which would be welcome given its high debt load.Most investors hold non-voting Class B shares and have been trashing the deal in public and private for months. The $2 billion is rich price for Redstone’s shares, meaning a premium buyout for her but not for them. Issuing new shares to incorporate Skydance would dilute their holdings. Investor have been threatening to sue. A few like Mari Gabelli own voting shares but the deal would still be done over their heads as well.Whether or not shareholders have a solid legal case, litigation is never welcome and the degree of discontent was enough for NAI to request revised deal terms.On investor said it would be almost impossible for any offer to satisfy everyone. It could include Skydance ponying up to take out the other Class A shareholders, but the B holders might be even angrier at that. Skydance could offer to take out some small percentage of B shares for a premium as well. It might agree to put a lower dollar figure on the merger. But a joint offer like one being considered by Sony and private equity Apollo — which would buy out all shareholders and take the company private — might be the only way to would stop the clamor. The partners haven’t yet made a formal offer, waiting for the outcome of the Skydance talks. Redstone does not appear to favor this option which said to be about $26 billion but could be lowered in due diligence if they two sides get that far.Adding to the drama, Paramount will report its latest quarterly earnings after market close today. CEOs usually preside over calls with the analyst community after the numbers. Bakish is not expected to.
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