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

1 month ago 2

A seemingly rich new offer is on the table for Paramount Global — but it’s not clear if it will unseat Skydance Media‘s existing deal to take over the media conglomerate.

On Wednesday, Apex Capital Trust, a conglomerate of financial institutions and financial services providers, announced that on July 12 it had submitted a competing offer to purchase Paramount Global shares with a total commitment of up to $43 billion.

It’s unknown how receptive Paramount and Shari Redstone’s National Amusements Inc., the controlling shareholder, may be to the unsolicited offer. But they are obligated to review any such formal offer in some fashion. Reps for Paramount Global and NAI declined to comment on Apex’s bid. A spokesperson for the special committee established by Paramount’s board to vet M&A offers did not respond to a request for comment.

After months of haggling, on July 7, Paramount Global and Skydance, David Ellison’s smaller media and production company, announced a two-part transaction that would result in Skydance buying out Redstone’s National Amusements Inc. and then merging with Paramount, whose properties include CBS, Paramount Pictures, Showtime/MTV Entertainment Studios and Paramount Media Networks. Skydance’s buyout of NAI and Paramount is backed by RedBird Capital Partners and Oracle billionaire Larry Ellison (David’s father).

Under a “go-shop” provision in that agreement, Paramount Global has the right to solicit a better offer in a 45-day window, which expires 11:59 p.m. ET on Aug. 21. If Paramount opts to go with a rival bid, the company would need to pay a $400 million breakup fee to the Skydance investor group.

Apex Capital Trust said it sent its offer to National Amusements Inc. and to an investment firm retained by the Paramount board’s special committee for M&A.

“We are confident in the expertise of the investment firm and their willingness to move expeditiously and efficiently to evaluate this offer and submit it to the Special Committee of the Board of Paramount as a proposal that is substantially superior to the Skydance deal,” Tatiana Logan, general counsel for Apex Trust, said in a statement. “Paramount and its assets are a national treasure, and we intend to treat them accordingly. Paramount’s global future is bright, but it requires resources, which we have and are enthusiastic to deploy, making it a win-win situation for all of Paramount’s stakeholders.”

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).”

According to Apex, it offer includes: the purchase of 100% of the capital stock of NAI for a price that combines the value of NAI’s shares of Paramount’s Class A and Class B Common Stock at $35.03 and $23.28 per share, respectively, and an additional amount for other assets held by NAI, subject to “fair market valuation of those assets.” Apex said it would purchase 100% of the remaining Paramount Global Class A common stock shares from shareholders other than NAI at $35.03 per share (representing a 33% premium over the 52-week high price for Class A shares as quoted on Nasdaq as of the offer date). In addition, Apex would purchase from each shareholder (other than NAI) with Class B shares 69% or more (at the shareholder’s election) of such shareholder’s Class B shares at $23.28 per share.

In its offer, Apex “emphasized that its priority in this transaction was to minimize personnel disruption and, to the extent possible, preserve Paramount’s existing workforce, whose efforts will be required to implement Apex’s business plan,” the company said.

Apex Capital Trust is a “multinational holding company and a qualified institutional investor in key finance and fintech sectors,” the New York-based company says. Apex also has developed proprietary technology for phone-to-phone sharing of battery charge and remote phone recharging. In a related investment, Apex Trust has acquired 40% ownership of Simmtronics, a multinational technology company manufacturing phones and other electronic devices.

Read Entire Article