National Amusements — the controlling shareholder of Paramount Global (NASDAQ:PARA) (NASDAQ:PARAA) — has drawn a $125M strategic investment from merchant bank investors, a key infusion that offers some financial breathing room after Paramount’s dividend cut.
Paramount stock (PARA) rose 5.9% after hours.
BDT Capital Partners, an affiliate of BDT & MSD Partners, reached the deal for a preferred equity investment.
National Amusements (led by Chair, CEO and President Shari Redstone) will pay down its revolving loan and recent term loans. Then NAI’s shares of Paramount Global that were pledged to those loans will be released back to NAI.
The investment is expected to close next week.
“Paramount has an incredible legacy, underpinned by its industry-leading content and media assets. We believe strongly in the value creation opportunities ahead for the company and its shareholders,” said BDT & MSD Chairman/co-CEO Byron Trott. That also might include strategic options for Paramount.
“NAI has conviction in Paramount’s strategy and execution, and we remain committed to supporting Paramount as it takes the necessary steps to build on its success and capitalize on the strategic opportunities in our industry,” Shari Redstone said.
She touted the “best assets in the media industry, with an incredible content library and IP spanning all genres and demographics, as well as the No. 1 broadcast network, the leading free ad-supported streaming television service and the fastest-growing pay streaming platform in the U.S.”
Paramount’s most recent earnings saw it post a heavy loss and move to slash its dividend by 79% as it struggled with an ad slump.