Billionaire Mario Gabelli, a key voting shareholder in the holding company that controls Paramount, said he may remain an investor despite initial reservations about a merger with Skydance. This follows Shari Redstone’s surprise acceptance of a merger proposal from Skydance, the Hollywood studio behind the “Mission: Impossible” franchise. “I may not sell stock if there is a deal with Skydance.
I need to see the transaction’s structure,” Gabelli said in an exclusive interview. While withholding a final opinion until further details are revealed, Gabelli expressed optimism about the deal. “If Skydance is paying $1.75 billion for National Amusements Inc.
(NAI) and NAI has $500 million of debt, that’s $1.25 billion left for NAI shareholders,” he noted, approximating a value of $20 per share. Gabelli’s potential lawsuit had been seen as a significant obstacle in the merger negotiations. However, the new arrangement, according to Gabelli, seems more favorable for minority shareholders, including himself.
Under the proposed deal, National Amusements, which holds 77% of Paramount’s voting shares, will not mandate approval from most non-Redstone shareholders.
Gabelli optimistic about merger details
“Shari did this right,” Gabelli added, praising Redstone’s handling of the proposed merger.
Paramount shares slightly increased, trading at $11.52, a 0.5% rise. Gabelli also expressed interest in any developments at the upcoming Sun Valley conference, particularly any Redstone and Warner Bros. Discovery CEO David Zaslav meetings.
Despite his overall positive outlook, Gabelli raised concerns about needing Federal Communications Commission (FCC) approval. “Under current law, a change of 25% ownership requires FCC approval,” he explained. Skydance’s CEO, David Ellison, has pursued a partnership with Paramount for months, receiving enthusiastic support from Redstone.
The revised offer of more favorable shareholder terms influenced Redstone’s acceptance of the deal. National Amusements, which holds a significant stake in Paramount’s Class A voting stock, owns movie theaters in the United States, Britain, and Latin America. The merger represents a notable chapter in Paramount Pictures’ ongoing legacy, renowned for its classic films such as Titanic, The Godfather, and the Transformers franchise.
