Mar 12, 2024 - Business

Scoop: Apollo reaches out to Paramount about deal

paramount

Illustration: Natalie Peeples/Axios

Apollo Global Management in recent days has reached out to a special committee formed by Paramount Global about a possible takeover or asset purchase, two sources familiar with the matter tell Axios.

State of play: Apollo would face competition, including a group led by David Ellison's film and TV studio Skydance Media.

  • That rival group, which includes private equity firms KKR and RedBird Capital Partners, is evaluating an all-cash bid for Paramount's parent, National Amusements Inc. (NAI), which controls 77% of Paramount's voting stock and a 10% financial stake.
  • Apollo is said to be evaluating a deal only with Paramount, whose major assets include Paramount Pictures, broadcaster CBS, a slew of Viacom cable networks, and streaming services Paramount+ and PlutoTV.
  • It's also possible that Apollo could wind up bidding only on select assets.

Context: Speculation of Apollo's interest first surfaced in January, but then cooled after a February report that the investment firm was no longer interested.

  • Axios reported in December that Warner Bros. Discovery CEO David Zaslav met with Paramount Global CEO Bob Bakish to discuss a possible merger, but those talks are now paused.
  • NBCUniversal parent Comcast has reportedly explored a commercial partnership with Paramount, but a deal to buy the entire company would be difficult given regulatory constraints.
  • Representatives for Apollo, Paramount and NAI declined to comment.

Between the lines: Apollo is no stranger to Hollywood, but its interest in Paramount comes at a trying time for the industry.

  • In early 2022, Apollo took a $760 million minority stake in Legendary Entertainment, which has produced hits such as "Dune" and "Jurassic World."
  • It later eyed a joint bid for Starz with Roku, but the deal never materialized.
  • Apollo most recently helped Yahoo reinvent itself after acquiring the firm from Verizon in 2021.

The big picture: Paramount is under enormous pressure to find a strategic partner or buyer, as it stares down a mountain of debt.

What we're watching: Apollo could face regulatory pushback due to CBS' local broadcast stations.

  • Regulators killed a proposed takeover of Tegna by Apollo affiliate Standard General last year.
  • Apollo bought a majority stake in Cox Media's broadcast group in 2019.
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