Sony and Apollo to jointly acquire Paramount for $26 billion in cash

The Paramount acquisition has been full of twists and turns. Sony Pictures and Apollo Global Management jointly bid $26 billion, proposing to acquire Paramount Global in an all-cash deal and delist it.

Sony and private equity giant Apollo submitted a nonbinding letter to Paramount Worldwide on Wednesday with a proposal that could include the assumption of debt and allow for negotiation, valuing the company above its current enterprise value of $22 billion, The Wall Street Journal first reported.

Regarding the acquisition of Paramount, Sony and Apollo initially jointly bid for the acquisition, but Skydance Media, LLC (formerly known as Skydance Productions), founded by David Ellison in 2006, stepped in and wanted to acquire Paramount. Skydance has worked with Paramount to produce blockbusters such as Mission: Impossible 4, Mission: Impossible 5, Mission: Impossible 6, Jack Reacher, G.I. Joe: The Force Awakens, Interstellar: Into Darkness, and World War Z.

Sony's joint offer comes as a special committee of Paramount's board of directors considering merger proposals is evaluating Skydance's best final offer, which would combine Paramount and Skydance while keeping Paramount Worldwide public. Paramount Worldwide controlling shareholder Shari Redstone is known to prefer a deal with David Ellison's Skydance, which is backed by Redbird Capital and KKR.

Representatives for Paramount Worldwide and the special committee of its board declined to comment. Representatives for Apollo and Sony Entertainment did not immediately respond to requests for comment. Paramount Worldwide shares rose 13% to $13.86 per share on Thursday after news of the Apollo and Sony Entertainment offers broke.

It is unclear how Paramount's board will handle Sony Apollo's proposal, having already rejected the private equity firm's proposal . Paramount's exclusive negotiating window with Skydance expires on Friday (May 3), but discussions could be extended.

If Sony Pictures and Paramount were to merge, it would likely lead to massive layoffs and reduce the number of major Hollywood studios from five to four after Disney acquired 20th Century Fox. Sony, which bought Columbia Pictures for $3.5 billion in 1990, is one of the industry's largest studios without a large direct-to-consumer streaming business.