Apex Capital Trust Submits $43 Billion Bid for Paramount Global, Including Payment of $400 Million Breakup Fee to Skydance

As an astute observer of the dynamic world of media and finance, I find myself intrigued by this unfolding saga at Paramount Global. With decades of experience under my belt, I’ve seen countless deals, mergers, and acquisitions that have shaped the landscape of our industry.


There’s a fresh proposition up for grabs for Paramount Global, yet it remains uncertain whether this offer could displace Skydance Media’s current agreement for acquiring the media corporation.

On Wednesday, Apex Capital Trust, a collective of financial entities offering various services, declared they had proposed a rival bid to acquire Paramount Global shares worth approximately $43 billion on July 12th.

It’s uncertain how open Paramount and Shari Redstone’s National Amusements Inc., the major shareholder, might be to the unexpected proposal. However, they are required to examine any formal offer in some way. Representatives for Paramount Global and NAI have chosen not to comment on Apex’s bid. A representative from the special committee set up by Paramount’s board to evaluate merger offers did not respond to a request for comment.

Following several months of negotiations, on the 7th of July, it was announced that Paramount Global and Skydance, a smaller media and production company owned by David Ellison, were set to complete a two-phase deal. In this transaction, Skydance will acquire Redstone’s National Amusements Inc., followed by merging with Paramount. The properties under Paramount’s control include CBS, Paramount Pictures, Showtime/MTV Entertainment Studios, and Paramount Media Networks. This strategic move by Skydance to take over NAI and merge with Paramount is supported by RedBird Capital Partners and Larry Ellison, a billionaire from Oracle (who happens to be David’s father).

According to the “go-shop” clause in the agreement, Paramount Global is allowed to search for a superior offer within a 45-day period ending at 11:59 p.m. Eastern Time on August 21. If Paramount chooses to accept an offer from another bidder, they will be obligated to pay a breakup fee of $400 million to the Skydance investor group.

Apex Capital Trust announced that they’ve dispatched their proposal to both National Amusements Inc. and the investment firm hired by the M&A special committee on Paramount’s board, regarding potential mergers and acquisitions.

“Tatiana Logan, legal representative for Apex Trust, stated that they are certain about the proficiency and readiness of the investment firm to swiftly and effectively review this proposal and present it as an offer significantly better than the one from Skydance to Paramount’s Special Committee of the Board. We highly value Paramount and its assets, considering them a national treasure, and we aim to handle them with utmost respect. The future of Paramount looks promising on a global scale, but it necessitates resources, which we have in abundance and are eager to utilize, thereby creating benefits for all parties involved in Paramount.”

Apex said it would assume Paramount’s debt totaling approximately $15.8 billion and pay the $400 million breakup fee to the Skydance investor group. Apex also committed to investing approximately $10 billion into Paramount’s working capital post-closing as part of Apex’s business plan for the company. The investment company said its offered purchase price is “contingent on Paramount retaining all its assets through closing (i.e., direct and indirect subsidiaries, affiliates, and material contracts).”

As stated by Apex, their acquisition proposal involves buying all of NAI’s shares for a price that calculates the worth of NAI’s Paramount Class A and Class B Common Stock at $35.03 and $23.28 per share respectively, plus additional funds for any other assets owned by NAI (valued fairly according to market conditions). Furthermore, Apex intends to acquire the remaining Paramount Global Class A common stock shares from shareholders excluding NAI at a price of $35.03 per share, which represents a 33% premium over the 52-week high price for these shares as quoted on Nasdaq as of the offer date. Additionally, Apex will purchase up to 69% of any Class B shares held by shareholders other than NAI at $23.28 per share, if the shareholder chooses to sell.

Apex emphasized in their proposal that they prioritize minimizing work disruptions during this deal, and if feasible, maintaining Paramount’s current team as they are essential for carrying out Apex’s business strategy, according to the company.

Apex Capital Trust, based in New York, describes itself as an international corporation that invests in significant finance and technological sectors. Additionally, this company boasts its own innovative technology for the transfer of battery power between phones wirelessly and remote phone recharging. In a related venture, Apex Trust has purchased a 40% stake in Simmtronics, a multinational tech firm known for manufacturing smartphones and various electronic devices.

RELATED: Edgar Bronfman Jr. Evaluating Potential Bid for Paramount Global to Counter Skydance Deal

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2024-07-31 21:47