Paramount Global Will Pay Skydance $400 Million Breakup Fee if It Lands a Better Offer
variety.comTodd Spangler NY Digital Editor Even after clinching a deal with Skydance Media, Paramount Global has the right to shop around for a better offer in a 45-day window.
But if Paramount agrees to accept a more attractive buyout deal, it would be on the hook to pay Skydance a $400 million breakup fee, David Ellison, founder and CEO of Skydance, told investors on a call Monday morning.
Under agreement with Skydance and financial backer RedBird Capital Partners, the special committee of Paramount’s board of directors has a 45-day go-shop period during which it will be permitted to “actively solicit and evaluate alternative acquisition proposals.” According to Paramount, it “does not intend to disclose developments with respect to the go-shop process unless and until it determines such disclosure is appropriate or is otherwise required.” The “go-shop” provision of the deal was agreed to by the Skydance team in lieu of giving Paramount Global’s nonvoting shareholders approval over the deal.
The 45-day window is seemingly intended to minimize the threat of shareholder litigation against the Paramount board and Shari Redstone’s National Amusements Inc., which owns the controlling voting stake in Paramount, by showing that they made good-faith efforts to maximize the value of any M&A transaction.
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