Sony Pictures Entertainment is working with investment firm Apollo Global Management to put together a bid for National Amusement’s entertainment subsidiary Paramount Global, according to a report.
On Thursday, the New York Times said the two companies have yet to submit an official bid and were still discussing among themselves what a deal to acquire Paramount might look like.
The discussions come at a time when Paramount’s decision to pursue exclusive merger talks with Skydance Media have received significant pushback from some investors.
Apollo previously made an $11 billion bid for Paramount, later upping the amount to $26 billion, according to media reports. The Paramount board reportedly ignored Apollo’s bids at the urging of National Amusements owner Shari Redstone, whose family owns a controlling stake in Paramount, according to Puck.
Discussions between Apollo and Sony are being led by Tony Vinciquerra, the CEO of Sony Pictures Entertainment, the Times said. A preliminary strategy involves an all-cash offer for Paramount and converting the entertainment giant into a privately-held firm that would be operated through a joint venture.
One person familiar with the discussions told the Times that the terms are still being ironed out, and Sony and Apollo may ultimately not submit another bid for Paramount. A potential transaction would involve Sony taking a majority stake in Paramount, with Apollo cashing out its minority stake by selling it back to Sony at a later time, the Times said.
The transaction would allow Sony to build out its production companies and television content distribution businesses. Less clear is what Sony and Apollo might do with Paramount’s linear television networks like CBS, MTV, Channel 5 in Britain and Network 10 in Australia.
Paramount’s stock was up nearly 10 percent in early hours trading on Friday, with its per-share price hovering around $12.
