Sony will not submit another bid for Paramount Global as “it does not fit well with our strategy,” according to the president of the Japan-based PlayStation maker.
Hiroki Totoki, who also serves as Sony’s chief operating officer and chief financial officer, told investors on an earnings call Wednesday that his firm will not make another proposal for the entertainment conglomerate, which is controlled by Shari Redstone’s holding company National Amusements.
The media heiress struck a deal last month to sell her 77% stake in NAI to Skydance Media, the independent film studio behind hits such as “Top Gun: Maverick” and “Mission: Impossible — Dead Reckoning Part One,” for more than $8 billion.
The on-again, off-again, on-again deal gives Paramount a 45-day “go-shop window” to entertain competing bids. If Paramount finds an offer it likes, it would be obligated to pay Skydance a breakup fee totaling $400 million.
The “go-shop” window expires on Aug. 21.
“If we have to acquire the whole of Paramount, it would be quite risky because it may not be well fitted to our capital allocation structure,” Totoki said after Sony reported a 10% rise in operating profit in the April-June quarter.
In May, Sony partnered with private equity firm Apollo Global to negotiate a possible acquisition of Paramount for $26 billion in cash.
But Sony reportedly reconsidered its bid after Paramount reported that its fiscal 2023 profit fell 7%.
Skydance, led by tech heir David Ellison and backed by private equity giant KKR and RedBird Capital Partner, plans to merge his studio with the entertainment giant should the tortured courtship with Redstone finally move forward.
The new combined company is valued at around $28 billion.
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