Skydance bid for Paramount hinges on Sherry Redstone as special committee terminates exclusive negotiations

Skydance Media is ready to walk away from its offering. Paramount Global Unless it receives a firm commitment from Apollo Global Management and controlling shareholder Shari Redstone, following the latest offer from Sony Pictures, according to a person familiar with the matter.

People familiar with the matter told CNBC’s David Faber that the exclusive window for negotiations between David Ellison’s Skydance, which is backed by private equity firms RedBird Capital and KKR, and Paramount ends on Friday and that will not be extended. Shares of Paramount rose after the report.

The consortium is awaiting word from Paramount’s special committee on whether the panel will recommend the company’s bid to acquire Redstone. Now, with Apollo and Sony officially expressing interest in acquiring the company for around $26 billion, Skydance Group is looking to Redstone to confirm its commitment to the deal.

The Skydance consortium is not willing to go around for a horse offering for Apollo and Sony, one of the people said. Still, depending on what Redstone says, Ellison may be willing to work with him, a second person said.

Spokesmen for Skydance, Redstone National Entertainment and Paramount’s special committee declined to comment Friday.

Apollo and Sony made their latest offer on Thursday, CNBC previously reported. A special committee is currently considering the bid, the people said.

As part of Skydance’s latest deal on the table, Redstone could take as little as $2 billion for its controlling stake in Paramount, less than Skydance’s initial offer. CNBC reported that the consortium is providing additional capital to common, Class B shareholders to pay an undisclosed trading price of about $11 per share at a premium of about 30%. In total, Redstone and Skydance will contribute $3 billion, the majority of which will go to Class B shareholders, according to people familiar with the matter.

The deal valued Skydance at about $5 billion, the people said. Like Skydance’s bid, Apollo-Sony’s offer includes a control premium for Redstone, according to people familiar with the matter.

Previously, Redstone had turned down Apollo’s offer in favor of exclusive negotiations with Skydance. Redstone prefers a deal that would keep Paramount together, as Skydance would offer, CNBC previously reported. A private equity firm is likely to break up the company.