Investing.com -- Shari Redstone's National Amusements has agreed to a preliminary deal to sell a controlling stake in Paramount Global (NASDAQ:PARA) to David Ellison's Skydance Media, according to Reuters.
The news agency, citing people familiar with the matter, said Skydance would pay $1.75 billion for National Amusements, the movie theater chain and holder of the Redstone family's 77% interest in Paramount. The companies have also agreed to a 45-day "go-shop period," during which other potential bidders for Paramount can submit their offers, the Wall Street Journal has also reported.
Under the terms of the plan, Paramount, the century-old movie studio behind hit films like "Titanic" and "The Godfather", would merge with its smaller counterpart Skydance.
Paramount's class B shares surged in premarket U.S. trading following the news, which was first reported by the WSJ. The stock has shed more than a fourth of its value since the start of the year, as Paramount -- the owner of networks like MTV and Nickelodeon -- grapples with a declining cable business, a significant debt burden, and the expensive expansion of its streaming offering.
The preliminary agreement comes after a previous round of negotiations fell through last month. Unlike in the previous round of negotiations, National Amusements is no longer insisting that the Paramount merger must be approved by a majority of non-Redstone shareholders. However, the proposed terms of the tie-up must receive approval from a special committee of Paramount's board.
Oliver Gray contributed to this report.