Sony and Apollo Global Management Explore Joint Bid for Paramount Global

Sony Pictures Entertainment and Apollo Global Management are in discussions about a potential joint bid to acquire Paramount Global, according to a report in the Financial Times. The move would significantly increase Sony's exposure to traditional TV channels and could double its movie market share if the acquisition goes through.

Apollo had previously made separate offers to acquire Paramount for around $26 billion, but those were rejected by Paramount's special committee due to concerns about Apollo's ability to complete the deal. The current discussions involve a structure where Sony would contribute Sony Pictures Entertainment to the joint venture, and both Sony and Apollo would provide cash to finance the transaction that would take Paramount private.

Under the proposed arrangement, Sony would secure a majority interest in the joint venture and oversee operations, including Paramount's extensive film library. Apollo would take charge of the CBS broadcast network and its local stations.

However, there are still significant obstacles that need to be overcome, including the ongoing exclusive 30-day negotiating window between Paramount and Skydance Media, as well as regulatory issues related to Paramount's ownership of broadcast TV stations. The Skydance deal would keep Paramount as a publicly traded entity, with Skydance and its partner RedBird Capital providing capital to reduce Paramount's debt.

Why this matters: The potential acquisition of Paramount Global by Sony and Apollo would reshape the media landscape, creating a formidable player in the entertainment industry. It highlights the ongoing consolidation and competition among media giants as they navigate the challenges posed by the rise of streaming services and the evolving viewing habits of consumers.

Some Paramount shareholders have voiced concerns that the Skydance deal would enrich controlling shareholder Shari Redstone at the expense of other shareholders. The potential joint bid from Sony and Apollo was first reported by The New York Times and is viewed as easing financing concerns and leveraging Sony's operational expertise and additional financial resources. Investors welcomed the emergence of a competing offer, as reflected by the jump in Paramount's stock price following the news of the Sony and Apollo Global Management discussions.

Key Takeaways

• Sony and Apollo in talks to jointly bid for Paramount Global acquisition.
• Proposed deal would increase Sony's exposure to traditional TV channels.
• Apollo's previous offers for Paramount were rejected due to financing concerns.
• Sony would have majority control and oversee Paramount's operations and film library.
• Acquisition faces obstacles, including Paramount's exclusive deal with Skydance Media.