Wall Street Bankers, Lawyers Lose Hundreds of Millions After Paramount-Skydance Merger Canceled: Sources

Wall Street bankers and law firms stand to lose hundreds of millions of dollars in fees after Shari Redstone this week made a last-minute decision to scrap plans to merge Paramount with Skydance Media, sources close to the talks said.

Redstone, the 70-year-old media heiress, pulled the plug on Tuesday on a deal to sell Paramount Global parent National Amusements to Skydance — even as a special committee of the media giant’s board was expected to meet to vote on Paramount’s merger proposal. .

Merger suitors typically pay a greatly reduced fee if they are unable to complete their deals. The Paramount-Skydance deal had an unusually large number of bankers and lawyers working on what they thought would be a landmark agreement.

Shari Redstone has drawn the ire of some Wall Street advisers because she has stayed away from the Skydance merger. Getty Images

“We’ve been working on this deal for months and months,” one of the bankers who worked on the deal told The Washington Post. “I feel bad for the Paramount employees and shareholders. They really got an excellent deal and Paramount could have had a second chance to grow.

Paramount shares have fallen more than 8% since news broke that the merger was cancelled, wiping out more than $1 billion in market value.

Meanwhile, law firm Latham & Watkins, whose merger advisory practice is led by global head Justin Hamill, had up to a hundred lawyers advising Skydance on the complex merger process, which included Skydance’s purchase of Redstone’s National Amusements holding company and the merger with Paramount, sources said. He said.

Latham’s lawyer Justin Hamill led a team of up to 100 lawyers working for Skydance in hopes of a merger. Will Ragozzino/BFA/Shutterstock

Throughout the negotiations, Skydance was also working with three investment banks: Bank of America and Moelis & Co. and The Raine Group, according to sources.

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Apollo Global Management and Sony Corp. A competing bid also didn’t pan out. They were working with Paul, Weiss, Rifkind, Wharton & Garrison for legal advice and with Citigroup and PJT Partners for financial advice, the sources said.

Bob Bakish, who ran Paramount through most of the sale, was also working on potential deals for the company outside of the sale with the help of investment bank LionTree, led by prolific dealmaker Aryeh Bourkoff.

Redstone felt Bakish was undermining her and forced him to step down as CEO on April 29, the sources said.

Paramount remains intact for the time being with the three CEOs getting the chance to run the business. Reuters

The law firms and banks advising Redstone’s National Amusements Holding and Paramount’s commission will retain their fees as they are not paid based on securing the deal.

Law firm Ropes & Gray worked with National Amusements alongside financial advisor BDT & MSD Partners. Cravath, Swaine & Moore advised the special committee of Paramount that was prepared to approve the merger. Centerview Partners and Rothschild & Co. With Paramount.

Representatives for LionTree, Moelis, Raine and Citi declined to comment. Representatives of other law firms and consulting firms mentioned in this story did not immediately respond to requests for comment.

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