Shari Redstone’s Cold Shoulder to Paramount Skydance Merger Deal Costs Her $8 Billion

Shari Redstone lost $8-billion as the Paramount Skydance Merger failed to realize.

Who is Shari Redstone?

Shari Redstone was born on 14^th April 1954 to Phyllis Gloria Raphael and Sumner Redstone. She has an older brother. Shari’s father Sumner Redstone was the founder and chairman of second Viacom and CBS Corporation, which were merged in 2019, and he also had majority ownership and chairmanship of National Amusements. His original surname was Rothstein which was changed to Redstone by Shari Redstone’s grandfather at the insistence of her father.

Shari Redstone holds a Bachelor’s degree from Tufts University and a LLM degree from Boston University. She practiced corporate, property and criminal law in Bostan before she got involved with the family business.

Shari Redstone was married to Ira A. Korff, a spiritual leader and a chaplain of the City of Boston and later divorced.  They have three children.

A glimpse of the merger talks between Paramount Global and Skydance Media

The merger talks between Paramount Global and Skydance Media were driven by the Redstone family. It is interesting to note that Paramount Global is controlled by the Redstone family through National Amusements.

Before getting into what was the supposed merger deal about, let us discuss a little about Paramount Global and Skydance Media. Paramount Global is an entertainment giant in which National Amusements holds a majority stake, which is 77% of the voting shares. On the other hand, Skydance Media is an American production company that specializes in almost every field including films, television, video games, animation, and sports.

As reported by the New York Post, the deal, valued at $8 billion, was to be completed in three phases:

Acquisition of National amusement by Skydance

The deal was to begin with Skydance acquiring National Amusement, which owns the majority stake in Paramount Global.

Paramount buying out Skydance shareholders

The second part of the deal involved the buying out of Skydance shareholders by Paramount Global using its stock. Buying out a shareholder using stock refers to a specific way of acquiring another company by using shares instead of cash.

Merger of Paramount Global and Skydance

The deal was to be completed by the merger of Paramount Global and Skydance media.

What went wrong with the Paramount Global and Skydance media merger deal?

Although, the official reasons for calling off the merger deal are still not known, there are strong possibilities that include:

1. Disagreement over the valuation of companies, where either or both of them felt that they were being undervalued.
2. Usually in a merger a larger company acquires a smaller one. But in this case it was opposite as a smaller company (Skydance Media) was acquiring the larger  company ( Paramount Global)
3. There must have been some opposition from the existing shareholders of Paramount Global, as the success of the deal would have meant dilution of their ownership stake in Paramount Global by issuance of shares to Skydance Media’s shareholders.
4. The consequences of the merger must not have been properly addressed.

All the reasons given above are mere speculations as no official statement has been made.

Why was the Paramount Skydance Merger deal attractive

It is important to note here that Paramount Global was facing a decline in its television business and had ahuge debt. The merger with skydance whould have given Paramount access to the vast content library of skydance and would have greatly helped in debt repayments.

Also, for Skydance, which was a smaller company than Paramount, it would have meant taking control over Paramount’s vast distribution channels.

How did the failed Paramount Skydance merger affect Shari Redstone?

Following the news of the failed merger deal, Paramount Global’s shares was almost down by 8%, causing the company to lose $650 million in market share. Also, Shari Redstone would have walked away with $2 billion if the deal had succeeded.

Conclusion

As the Paramount Skydance merger deal has failed, it could lead to even more challenges for Paramount Global as its future remains uncertain. This deal could have been historic as a smaller company was to acquire a larger one.

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