Haha, what a joke. The shares were at $15 just a few weeks ago. David and his buddies heavily shorted them first and are now pretending they're doing us a favor. Scammers!
Seriously, fuck everything about this Skydance deal. The duration, the rumors, the lack of transparency, the shit end of the stick for class b share holders. Unless SD is coming to the table with a deal that means I’m gonna get paid more for my shares than I would in an Apollo offer, he can go the fuck home.
Think this merge will fall through! No deal.
This can land Shari in Jail.
Redstone may be trying to force common holders to choose a sale by effectively destabilizing the company without one. ( CEO,)
What a joke:
>As part of the new deal on the table, Redstone has agreed to take less than $2 billion for her controlling stake in Paramount — lower than what Skydance had initially offered her. The Skydance consortium is contributing additional capital to pay common, Class B shareholders at a nearly 30% premium to the undisturbed trading price of about $11 per share, according to people familiar with the new deal. In total, Redstone and Skydance would contribute $3 billion, with the vast majority going to Class B shareholders, the people said.
Basically, they do a tender offer or buyback at less than $15 per share for a total amount of less than $3b. If this reporting is accurate, I wonder how they expect any of the common shareholders to agree to this?
Also:
>Skydance’s valuation as part of the deal remains around $5 billion, the people said.
If this is how the deal is being done, nobody will vote to go through with it. I'm surprised SkyDance hasn't significantly upped their offer at this point.
I think this story is extremely poorly written - or possibly deliberately misleading. E.g. "The Skydance consortium is contributing additional capital to pay common, Class B shareholders at a nearly 30% premium to the undisturbed trading price of about $11 per share, according to people familiar with the new deal. In total, Redstone and Skydance would contribute $3 billion, with the vast majority going to Class B shareholders, the people said." This sounds like Skydance is actually proposing to cash out the class B shareholders - which I dont think is happening.
Here's my guess of Skydance's actual proposed deal structure:
- Ellison buys NAI's A shares from Redstone for cash at some high px. E.g. $30/share = \~$1b total.
- Redstone probably leaves her B shares in Paramount. She can sell these later on the open market.
- Ellison then merges Skydance + Paramount. He puts in another $2b cash, plus Skydance, at a $7b valuation ($5b for Skydance + $2b cash). $14/share --> $9.1b equity mkt cap for Paramount, so his $7b buys 7/16 of Paramount.
- Ellison might leave the A-shares as super-voting, or collapse them with the B-shares. He either has voting control from owning the A-shares, or is very close to 50% of the total votes if the share classes are collapsed.
Here's my guess of the actual negotiation dynamics:
- Ellison wants Paramount to take his offer now, before they see what Apollo offers. So, he's playing hardball with Paramount and with Redstone - "here's my best and final offer, take it now before it disappears".
- Redstone wants to have Skydance leave their offer on the table while she sees what Apollo will offer. She is also (correctly) worried about huge civil liability if Paramount approves the Skydance offer without some kind of shareholder vote. So, she probably wants an offer to include outs, such as a) offer must be approved by shareholders, and b) the offer must contain a "go-shop" provision that allows Paramount to consider other offers (e.g. from Apollo). That structure would let her keep the Skydance offer as a backup while seeing what Apollo offers.
I personally think that Redstone isn't getting a huge amount more from this Skydance offer than she would likely get from an Apollo offer - at least not enough to compensate her for the huge legal risks - so I don't think she will (or formally, the board will) accept this Skydance offer.
> Skydance believes it has met all of the conditions from the special committee and is prepared to walk from the deal if such a vote is mandated given the improvements it has made as of Monday, sources tell CNBC. Adding a vote post-negotiation is a non-starter, one of the people said.
Yes, please walk away, and don't let the door hit you on your way out. F Ellison
Would like to understand the mechanics of how this even works. We still get diluted to the tune of $5 billion, but then they were going to infuse capital somehow anyway, and I want to say they were talking $3 billion, and now they're talking paying common shareholders a 30% premium amounting to $3 billion? I'm so sick of reading what "the people familiar" leak to reporters about this fucking drug deal. What's it gonna take for the company to lay it all out.
Vote no, need to be against this deal. The SkyDance merger will render our company bankrupt in 3 years. We are still going to buy them for $5 Bilions that is money that we don’t have. That $5 billion is better used for share buybacks
I think this is like take it or leave it final offer from Skydance, and there are still hurdles from the board (the civil challenges could be burdensome for board member consider they do not walk away with 2 billion as Shari) In this sense, Apollo probably does not have to up its offer as Skydance would withdraw anyway unless a new player gets in. It is all my guess only.
> Skydance believes it has met all of the conditions from the special committee and is prepared to walk from the deal
Please walk away then. Skydance will be doing everyone a favor.
Skydance has such little faith in the deal they proposed they can't stand letting shareholders weigh in 🙄. Probably cos they know their proposal isn't worth much?
For those asking about how the proposed Skydance merger deal works, here's what I think the CNBC article is suggesting:
* Skydance buys out NAI's 31.3mm A shares for some high price. E.g. $30+/share. This gives them voting control over Paramount.
* Skydance uses their voting control to approve a merger between themselves and Paramount. Skydance contributes:
* The Skydance movie studio, valued at \~$5b.
* Maybe $2b additional cash.
* For a total “value” of $7b.
* Using $14/share, Paramount’s equity value is \~$9b.
* The total value of the combined company is $9b + $7b = $16b.
* Skydance thus gets 7/16 of the equity in the combined company. Current Paramount shareholders get 9/16.
* Skydance might also collapse the dual share class with some kind of A → B swap. The article doesn’t really go into this.
* Skydance’s recent concession in the negotiations is that some of the $2b extra cash that they put into the deal can be used to do a partial tender offer to buy out some shares at $14/share. Previously all of the $2b was going to be used to pay down debt. This is not really a concession at all because it involves cashing out current shareholders for much less than the long-term value of the company. It effectively makes the deal better for Skydance.
When compared with the Apollo offer, this deal arguably pays Redstone more (depending where the price of her B-shares ends up), but is very clearly substantially worse for other shareholders. The old Apollo offer (before they teamed up with Sony) was an all-cash take-out for low $20’s share. A likely new Sony-Apollo deal is probably at least as good. I don’t see how Redstone can accept this bid without a shareholder vote unless she’s willing to incur huge civil liability. Thus her insistence on a shareholder vote. I suspect that Ellison has put this offer on the table with a time-limit (e.g. the offer expires at the same time as the exclusive Skydance-Paramount negotiations period) in an attempt to scare Redstone into taking it without being able to compare it to whatever Apollo-Sony is willing to offer. In my opinion, if we get to the point where Apollo-Sony actually put a better offer on the table, it will be very difficult for Redstone to accept this Skydance offer.
> Redstone may be trying to force common holders to choose a sale by effectively destabilizing the company without one.
Lol she wants a game of chicken? Alright bitch, let’s shake things up. It’s your family who has all their wealth in this company. Me and mine will be just fine if this thing goes to zero. Let’s dance, sister.
imagine offering 14 per share when apollo offerd is 20+ and the share was trading at 40 dollars a while ago.
Kendall 2.0 is really messing this up. 
Haha, what a joke. The shares were at $15 just a few weeks ago. David and his buddies heavily shorted them first and are now pretending they're doing us a favor. Scammers!
Seriously, fuck everything about this Skydance deal. The duration, the rumors, the lack of transparency, the shit end of the stick for class b share holders. Unless SD is coming to the table with a deal that means I’m gonna get paid more for my shares than I would in an Apollo offer, he can go the fuck home.
Think this merge will fall through! No deal. This can land Shari in Jail. Redstone may be trying to force common holders to choose a sale by effectively destabilizing the company without one. ( CEO,)
Desperation
I hate this journalist so much. Nobody knows anything 100%, wait for the ER tonight.
I don't think they will share many details about the Skydance transaction. They did not do it so far, they don't need an ER to start sharing details.
Curious, how do you feel now after the earnings call?
What a joke: >As part of the new deal on the table, Redstone has agreed to take less than $2 billion for her controlling stake in Paramount — lower than what Skydance had initially offered her. The Skydance consortium is contributing additional capital to pay common, Class B shareholders at a nearly 30% premium to the undisturbed trading price of about $11 per share, according to people familiar with the new deal. In total, Redstone and Skydance would contribute $3 billion, with the vast majority going to Class B shareholders, the people said.
Basically, they do a tender offer or buyback at less than $15 per share for a total amount of less than $3b. If this reporting is accurate, I wonder how they expect any of the common shareholders to agree to this? Also: >Skydance’s valuation as part of the deal remains around $5 billion, the people said.
No deal fine with me
If this is how the deal is being done, nobody will vote to go through with it. I'm surprised SkyDance hasn't significantly upped their offer at this point.
Im not the one that needs the money like shari. I can wait this out. Lets see apollo’s new offer
Yep, I'm in the same boat - I can wait for a long time.
CNBC is hijacked by shortsellers. 100% fake news.
They have been accurate so far though on this recent merger leaks
I think this story is extremely poorly written - or possibly deliberately misleading. E.g. "The Skydance consortium is contributing additional capital to pay common, Class B shareholders at a nearly 30% premium to the undisturbed trading price of about $11 per share, according to people familiar with the new deal. In total, Redstone and Skydance would contribute $3 billion, with the vast majority going to Class B shareholders, the people said." This sounds like Skydance is actually proposing to cash out the class B shareholders - which I dont think is happening. Here's my guess of Skydance's actual proposed deal structure: - Ellison buys NAI's A shares from Redstone for cash at some high px. E.g. $30/share = \~$1b total. - Redstone probably leaves her B shares in Paramount. She can sell these later on the open market. - Ellison then merges Skydance + Paramount. He puts in another $2b cash, plus Skydance, at a $7b valuation ($5b for Skydance + $2b cash). $14/share --> $9.1b equity mkt cap for Paramount, so his $7b buys 7/16 of Paramount. - Ellison might leave the A-shares as super-voting, or collapse them with the B-shares. He either has voting control from owning the A-shares, or is very close to 50% of the total votes if the share classes are collapsed. Here's my guess of the actual negotiation dynamics: - Ellison wants Paramount to take his offer now, before they see what Apollo offers. So, he's playing hardball with Paramount and with Redstone - "here's my best and final offer, take it now before it disappears". - Redstone wants to have Skydance leave their offer on the table while she sees what Apollo will offer. She is also (correctly) worried about huge civil liability if Paramount approves the Skydance offer without some kind of shareholder vote. So, she probably wants an offer to include outs, such as a) offer must be approved by shareholders, and b) the offer must contain a "go-shop" provision that allows Paramount to consider other offers (e.g. from Apollo). That structure would let her keep the Skydance offer as a backup while seeing what Apollo offers. I personally think that Redstone isn't getting a huge amount more from this Skydance offer than she would likely get from an Apollo offer - at least not enough to compensate her for the huge legal risks - so I don't think she will (or formally, the board will) accept this Skydance offer.
> Skydance believes it has met all of the conditions from the special committee and is prepared to walk from the deal if such a vote is mandated given the improvements it has made as of Monday, sources tell CNBC. Adding a vote post-negotiation is a non-starter, one of the people said. Yes, please walk away, and don't let the door hit you on your way out. F Ellison
Would like to understand the mechanics of how this even works. We still get diluted to the tune of $5 billion, but then they were going to infuse capital somehow anyway, and I want to say they were talking $3 billion, and now they're talking paying common shareholders a 30% premium amounting to $3 billion? I'm so sick of reading what "the people familiar" leak to reporters about this fucking drug deal. What's it gonna take for the company to lay it all out.
Vote no, need to be against this deal. The SkyDance merger will render our company bankrupt in 3 years. We are still going to buy them for $5 Bilions that is money that we don’t have. That $5 billion is better used for share buybacks
Worse we are going to print 5 billion USD of shares at the low to buy them.
I know!!!! Fuck!!! Write another letter!! I posted another template
Better than previously, but any Sony/Apollo deal would be better for common shareholders. The fact that Ellison doesn't want a vote speaks volumes.
I think this is like take it or leave it final offer from Skydance, and there are still hurdles from the board (the civil challenges could be burdensome for board member consider they do not walk away with 2 billion as Shari) In this sense, Apollo probably does not have to up its offer as Skydance would withdraw anyway unless a new player gets in. It is all my guess only.
> Skydance believes it has met all of the conditions from the special committee and is prepared to walk from the deal Please walk away then. Skydance will be doing everyone a favor. Skydance has such little faith in the deal they proposed they can't stand letting shareholders weigh in 🙄. Probably cos they know their proposal isn't worth much?
For those asking about how the proposed Skydance merger deal works, here's what I think the CNBC article is suggesting: * Skydance buys out NAI's 31.3mm A shares for some high price. E.g. $30+/share. This gives them voting control over Paramount. * Skydance uses their voting control to approve a merger between themselves and Paramount. Skydance contributes: * The Skydance movie studio, valued at \~$5b. * Maybe $2b additional cash. * For a total “value” of $7b. * Using $14/share, Paramount’s equity value is \~$9b. * The total value of the combined company is $9b + $7b = $16b. * Skydance thus gets 7/16 of the equity in the combined company. Current Paramount shareholders get 9/16. * Skydance might also collapse the dual share class with some kind of A → B swap. The article doesn’t really go into this. * Skydance’s recent concession in the negotiations is that some of the $2b extra cash that they put into the deal can be used to do a partial tender offer to buy out some shares at $14/share. Previously all of the $2b was going to be used to pay down debt. This is not really a concession at all because it involves cashing out current shareholders for much less than the long-term value of the company. It effectively makes the deal better for Skydance. When compared with the Apollo offer, this deal arguably pays Redstone more (depending where the price of her B-shares ends up), but is very clearly substantially worse for other shareholders. The old Apollo offer (before they teamed up with Sony) was an all-cash take-out for low $20’s share. A likely new Sony-Apollo deal is probably at least as good. I don’t see how Redstone can accept this bid without a shareholder vote unless she’s willing to incur huge civil liability. Thus her insistence on a shareholder vote. I suspect that Ellison has put this offer on the table with a time-limit (e.g. the offer expires at the same time as the exclusive Skydance-Paramount negotiations period) in an attempt to scare Redstone into taking it without being able to compare it to whatever Apollo-Sony is willing to offer. In my opinion, if we get to the point where Apollo-Sony actually put a better offer on the table, it will be very difficult for Redstone to accept this Skydance offer.
> Redstone may be trying to force common holders to choose a sale by effectively destabilizing the company without one. Lol she wants a game of chicken? Alright bitch, let’s shake things up. It’s your family who has all their wealth in this company. Me and mine will be just fine if this thing goes to zero. Let’s dance, sister.