Shari Redstone launches auction of Paramount Global’s holding company: sources

Shari Redstone is launching a formal auction of National Amusements, the holding company that controls struggling media giant Paramount Global, The Post has learned. BDT Capital Partners, the bankers for Redstone, the 69 year old daughter of late media baron Sumner Redstone, have begun circulating nondisclosure agreements to private equity firms to view National Amusements’ financials — widening the search for prospective bidders which thus far have included Warner Bros.

Discovery, according to sources close to the situation. Redstone is looking for a steep markup for National Amusements, which has a 10% stake in Paramount Global and controls 77% of its voting shares — as much as 50% of their market value, according to a source briefed on the process. “I think she would prefer to sell all of it instead of just the holding company,” a source close to Redstone said, noting that talks to sell Paramount Global itself haven’t yet borne fruit.

“But there might not be a bid out there.” Paramount Global — whose movie studio is behind the “Mission: Impossible” and “Transformers” franchises, and also owns CBS, Nickelodeon, Comedy Central and MTV — ended Wednesday with a market capitalization of $9.4 billion, giving National Amusements’ shares in the company a face value just shy of $1 billion.

The stake could be worth considerably more given the voting shares’ control over Paramount. In addition, National Amusements owns a handful of money losing movie theater chains including Showcase Cinemas, Multiplex Cinemas and Cinema de lux. A rep for National Amusements declined to comment. On Wednesday, the Wall Street Journal reported that Skydance, the Hollywood studio that co produced “Top Gun: Maverick” with Paramount, is in talks for an all cash bid for National Amusements, with Skydance CEO David Ellison getting backing from his tech tycoon father, Oracle founder Larry Ellison.

Ellison is angling to buy at least a majority stake in National Amusements with an eye toward merging his studio with Paramount, according to the paper. Those talks are in the “very early stages” and could fall apart, the paper reported on Wednesday. Redstone is casting a wider net as National Amusements faces a March deadline for a $37.5 million payment on a $175 million loan from Wells Fargo — cash that it may not be able to pay, according to sources.

Last May, National Amusements issued $125 million in preferred stock to its banker Byron Trott’s BDT partners, with the shares entitled to 7.75% interest. Those obligations could make National Amusements a tougher sell to private equity, sources said. Although buyout firms wouldn’t face the same regulatory hurdles to a deal as media rivals, added difficulties in financing the deal would make it more challenging to turn a profit, sources said.

And while Paramount is in the process of trying to sell the BET network to raise its stock price, proceeds likely couldn’t be used to pay off National Amusement’s debt given Paramount’s own onerous debt load, one of the sources said. Last month, Paramount Global CEO Bob Bakish met with Warner Bros.

Discovery CEO David Zaslav to discuss a possible merger. Redstone also has held exploratory talks with Gerry Cardinale’s private equity firm RedBird Capital Partners, which backs Skydance, according to sources. Elsewhere, National Amusements’ options look increasingly limited. Any tech giants would face a tough antitrust review of a Paramount Global purchase.

Warner Bros. Discovery’s shares tanked on reports of the talks between Bakish and Zaslav. A bid from RedBird also could face regulatory hurdles: The firm reportedly raised $750 million from Abu Dhabi in its $2.3 billion fund, and any deal for a foreign investor to buy more than 10% stake in a US media company faces strict scrutiny from the Federal Communications Commission, sources noted..