WHEN: Today, Tuesday, May 14, 2024
WHERE: CNBC’s “Power Lunch”
Following is the unofficial transcript of breaking news from CNBC’s David Faber on “Power Lunch” (M-F, 2PM-3PM ET) today, Tuesday, May 14. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2024/05/14/sony-rethinking-its-bid-for-paramount-sources-tell-cnbc.html.
All references must be sourced to CNBC.
TYLER MATHISEN: First though, an update on the bid for Paramount and David Faber has the details. Hi, David.
DAVID FABER: Hey, Tyler. Yeah, as you guys well know, I’ve been following this one pretty closely as I did 30 years ago when Sumner Redstone and Barry Diller were fighting over the property. Another saga perhaps worthy of its own movie is the battle for Paramount some things to add to the mix today because we’ve been very much focused on the potential of a bid from Sony and its partner Apollo, but people close to the situation that I’ve been speaking to of late indicate that the likelihood of a bid at least for the full company seems to be fading a bit. There has not been an NDA signed by Sony at this point, a nondisclosure agreement that you would typically sign so you can begin real due diligence, and beyond that was a fallen Sony parent’s stock price last week that we can show you as well that may have given them some pause, not to mention, of course, what is there’s the continued deterioration of the environment we know so well, namely the cable ecosystem, all of which has led to what I am told is at least quote “a rethinking” of the Paramount bid. That does not mean that there would not be some sort of bid potentially forthcoming, but will it be restructured? Would it perhaps simply look more like some of the other things that we’ve heard about as well trying to take control of a NAI and therefore exert control over the combined company in that way, but certainly something that people may want to keep in mind. Again, this was never going to be something that moved easily but you may recall of course that they did send a letter of interest and expressed interest at a $26 billion price that of course, including the roughly 15 or so billion indebted paramount, but it did result in Paramount stock price moving higher. You can see Sony is up today but you can also see the decline I’m talking about as you take a look at Paramount shares adjusting for our report. I should also add by the way that while the David Ellison, the Skydance / RedBird partnership that has been pursuing control of Paramount as well is no longer in an exclusive period of negotiation. They have continued to do their work. And so perhaps if you’re handicapping it at this point, given at least this latest development regarding Sony and Apollo, perhaps the Ellison Skydance bid, once again may come to the fore. Who knows at this point, but given how closely we’ve been following it, Tyler, wanted to at least share that with our audience at this point.
MATHISEN: My question was going to go to that question of Skydance and RedBird. RedBird, obviously deep pocketed person, lots of media people in it, and whether that had this, whether the fact that Sony is rethinking bring Skydance closer if you could put it that way to concluding some kind of acquisition of Paramount.
FABER: You know, listen, there is a level of complexity here that’s high in all of this and in particular the Skydance deal which they have made contingent upon, at least previously, the merger getting approval from the special committee of the board of directors to value Skydance, to essentially purchase Skydance in a way, merge it in with Paramount. And then as we’ve reported many times, there would also be a significant issuance of equity by Newco as we would call it, that would be purchased in part by Larry Ellison, by RedBird, by KKR, which is also an owner of Skydance right now, and perhaps many others. So there’s a high level of complexity there. However, the control shareholder, National Amusements run by Shari Redstone, has in the past at least indicated as my reporting interest in pursuing that bid and being in favor of it if you will. Will that lead to a finish here that they actually get to the finish line, I should say Tyler, I don’t know. As you well know, all of these things are quite dynamic in terms of how they move. There is a hope, given how long this has gone on that it something will be concluded over the let’s call it the next couple of weeks. And remember, you’re dealing with a new management at Paramount itself, which replaced its CEO Bob Bakish with a trio of senior people who are running the company. One final point, by the way, I forgot to add in terms of at least the way Sony’s looking at it. And of course, the way the Skydance group is as well. There is a very important renegotiation coming up for Paramount in terms of distribution of its cable networks on Charter, the big cable company, that had been extended. That extension runs out very, very soon and so all the parties will be very much focused on the economics of that deal, and how or if, in any way it harms Paramount’s profitability. So a lot of moving parts here but again, the big headline this afternoon Tyler is at least from their perspective, Sony, the word being used rethinking.
