Paramount to weigh Apollo offer as Ellison’s exclusivity ends

The $26 billion offer from Apollo Global Management Inc. and Sony Group Corp. this week threw a wrench in talks between Paramount Global and film producer David Ellison.

The special committee of Paramount’s board that had been negotiating with Ellison notified him on Friday that talks will no longer be exclusive, according to people familiar with the discussions.

David EllisonPhotographer: Mark Von Holden/Variety/Getty Images

While Apollo has approached Paramount several times in the past few weeks, the latest proposal, coming with Sony as partner, had more specific details than previous ones, according to a person familiar with the board’s thinking. By leaving their options open, Paramount directors are angling for a better offer from Apollo or Ellison, the person said.

The committee, which is composed of Paramount’s independent directors, found itself in a bind in recent weeks. A number of shareholders, including Mario Gabelli and Ariel Investments’ John Rogers, have expressed disapproval for an Ellison offer that would buy out the company’s controlling shareholders, the Redstone family, at a premium and dilute the holdings of other investors through a merger with his Skydance Media.

Paramount’s move is risky. Ellison and his partners haven’t made up their minds on what they want to do next, according to another person familiar with their thinking. It’s possible that they will just walk away from talks, the person said.

Paramount has other options as well. The company’s newly appointed trio of co-chief executive officers is working on a plan that includes additional cost cuts, sales of non-core assets and a possible partnership with Comcast Corp. that could reduce losses at the Paramount+ streaming service.