(Reuters) -Paramount Global’s board has discussed entering exclusive merger discussions with Skydance, days after it received a $26 billion all-cash offer from private equity firm Apollo Global Management (NYSE:), according to a person familiar with the matter.
Shares of Paramount surged about 15% to $13.52 in Wednesday’s session.
The deal, if it goes through, will add to consolidation in the media industry as it grapples with a changing landscape of streaming gaining dominance over traditional television and the impact from Hollywood’s strikes last year, with a soft advertising market adding to the pressure.
Media mogul Redstone has been reluctant to part with the film studio, considered the jewel of the conglomerate and among Hollywood’s most prestigious, that her father, the late Sumner Redstone, acquired in 1994.
Its expansive movie library includes classics such as “The Godfather” and “Breakfast at Tiffany’s,” as well as blockbuster franchises like “Mission: Impossible”, “Star Trek” and “Transformers.”
However, the deterioration of the global entertainment business has wiped out more than $16 billion in value from the media company formed through the hard-fought reunion of CBS and Viacom in 2019. The company’s market capitalization fell below $10 billion in January.
Paramount, Skydance and a spokesperson for Shari Redstone did not immediately respond to Reuters’ requests for comment.
A Bloomberg News report on Wednesday said Shari Redstone, the controlling shareholder of Paramount had reached a tentative agreement to sell her stake in the company to Skydance.
Skydance is holding exclusive talks with a panel of independent directors at Paramount as part of a provisional accord to buy the Redstone family’s holding company National Amusements, the report added.
In January, a source told Reuters Skydance Media CEO David Ellison, son of Oracle (NYSE:) co-founder Larry Ellison, was exploring an all-cash bid to acquire National Amusements.
National Amusements directly or indirectly owns 77% of the voting shares of Paramount. It controls CBS, cable networks Nickelodeon and Comedy Central and also owns 800 film screens in the United States.
