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Paramount is preparing to fire CEO Bob Bakish, adding more uncertainty to the Shari Redstone-controlled Hollywood group as it holds merger talks with Skydance Media and prepares for another possible bid, according to three people familiar with the matter.
The company is expected to receive a counteroffer from Sony and Apollo this week, according to people familiar with the situation.
Bakish has worked for Paramount and its predecessor, Viacom, for more than two decades. Redstone installed Bakish as CEO of Viacom in 2016 and took over as head of the entire company after it merged with CBS in 2019.
However, Bakish, previously considered a Redstone loyalist, clashed with her over the Skydance bid, which was opposed by common shareholders who say its structure benefits her but leaves them out. Bakish had not been “cooperative” during the sales process, a person familiar with the matter said.
Bakish’s future with the company will be determined at a board meeting on Sunday. His expected dismissal would be the latest twist in a complicated and protracted drama at Paramount, the storied Hollywood company behind films and television shows such as The Godfather, Titanic and Star Trek.
Paramount, which competes against larger rivals such as Netflix, is losing billions of dollars on its streaming service as it struggles with the long-term decline of its television channels.
Paramount’s stock valuation has halved over the past year, to about $8 billion, as investors grew discouraged about the company’s prospects.
David Ellison, the CEO of Skydance, backed by his billionaire father, Oracle founder Larry Ellison, and private equity groups RedBird and KKR, is seeking a complicated deal in which his company would buy National Amusements, which owns nearly 80 percent of Paramount’s voting rights. shares, for 2,000 million dollars. Paramount would then acquire Skydance for $5 billion in an all-stock deal.
Some Paramount shareholders have spoken out against the proposed structure of the deal with Skydance and have threatened to sue if it goes ahead. A $26 billion all-cash bid by Apollo for Paramount was recently rejected, and four Paramount board members have since withdrawn their names for re-election in June.
John Rogers, president and co-CEO of Ariel Investments, said Friday that “a deal that favors Shari at the expense of the rest of us (is) extremely problematic.”
“It feels like a company in disarray,” he told the Financial Times.
Skydance has been involved in exclusive talks with Paramount that are expected to conclude on May 3, according to people familiar with the situation, but could be extended. Sony and Apollo were seeking to submit their joint offer as close to that expiration date as possible, those people added. Skydance hopes to conclude negotiations by early June.
Apollo is still studying the structure of its bid and whether it will involve Legendary Entertainment, the film studio in which it bought a partial stake in early 2022. The studio has seen a number of successes this year, including Dune: Part Twowhich has strengthened its finances.
Some analysts say an acquisition by Japan’s Sony and Apollo could have trouble getting approved by regulators.
Paramount is expected to report earnings after the market closes on Monday.
Ellison has had a close relationship with Paramount: Skydance has co-produced several hits with Paramount, including Top Gun: Maverick and Mission Impossibleand Ellison has expanded his studio to animation, television and sports.
Skydance’s plan is to recapitalize the company, which Ellison would lead. He would also install new management, including Jeff Shell, the former NBCUniversal executive who now works for RedBird.
Paramount and Sony declined to comment.
Paramount shares rose last fall amid speculation that it could be acquired, but are down 18 percent this year.