Sony Pictures Entertainment, affiliated to Japanese conglomerate Sony Group Corp., is in discussions with US private equity group Apollo Global for making a joint takeover bid for entertainment giant Paramount Global, reports said citing people familiar with the matter. The talks are said to be in an early stage.
Following the news, Paramount Global shares were gaining around 10.7 percent in pre-market activity on the Nasdaq, to trade at $12.14.
Paramount is already in exclusive talks with David Ellison\'s Skydance Media about a potential deal. Skydance is offering to buy Paramount\'s controlling shareholder Shari Redstone\'s National Amusements, which controls 77 percent of Paramount\'s voting stock. This would later lead to a merger with both companies.
Meanwhile, Skydance\'s approach is facing criticism from some Paramount investors, who think the deal would leave at a disadvantage, and urged to Paramount to explore other options.
Apollo previously had submitted a takeover bid of more than $26 billion for Paramount. But the media firm refused to engage with the private equity group.
As per the latest reports, a Sony- Apollo competing bid is still being structured, with plans to take Paramount private in an all cash deal.
If successful, the deal would combine Sony\'s film franchises including Ghostbusters and Uncharted, with Paramount. There would also be the potential for consolidation of some marketing and distribution capabilities between the studios.
In the joint venture, Sony would hold a majority stake and operate the media firm and its library of films.
Paramount Global\'s shares had surged around 21 percent in late January following reports that Byron Allen, the founder of Entertainment Studios, submitted a $30 billion debt and equity offer on behalf of Allen Media Group for Paramount Global. Paramount then said it would consider the bid.
Paramount Global CEO Bob Bakish in mid February had informed that about 800 people or an estimated 3 percent of its workforce will be laid off, as part of the company\'s cost-cutting measures.
The media company is struggling to maintain its profitability, especially from its streaming service.
During this time, Warren Buffett\'s Berkshire Hathaway reported to have made significant reductions to its long-standing investment in Paramount Global, among others.
In December last year, there were reports that Warner Bros. Discovery Inc. and Paramount Global had held talks about a potential merger of the two media companies.
Earlier this year, Sony Group\'s unit Sony Pictures Networks India Private Ltd. or SPNI, now known as Culver Max Entertainment Ltd., agreed to terminate its planned merger of Zee Entertainment Enterprises Ltd. or ZEEL. It was in December 2021 that the companies entered into definitive agreements for the merger of ZEEL with and into SPNI.