Key Events

👉 The Redstone and Skydance Saga: To Merge Or Not To Merge?

Paramount Global Shares reached their highest in two months after a merger deal with TV and media company Skydance was revived.

Paramount has an atypical corporate structure. National Amusements is a family company that controls Paramount, but they only own 5% of Paramount but have 77% of the voting rights since most of Paramount’s shares do not have any voting rights.

Therefore, for the deal to come through, David Ellison, the CEO of Skydance, would have to offer Shari Redstone (the CEO of National Amusements) a sweet deal to get her votes. But if the deal is too good, the public shareholders who do not have majority voting rights will complain.

Why is that important? The deal would have to be approved by National Amusements’ board of directors who have a fiduciary duty to the public shareholders. So, the idea of giving Redstone all the money will not fly and possibly invite litigation.

Redstone wanted to hold a vote amongst the non-voting public shareholders to ascertain their sentiment but Skydance did not want the deal to be contingent on that vote.

So, how will Redstone get herself an attractive deal?

The new terms of the merger indicate higher valuations for National Amusements and include language protecting Redstone from litigation. The goal is to give Redstone a sweetener but also let her keep it.

👉 The Labor Market Shows Signs Of Weakness

The June job report clearly indicates that the economy is losing its momentum. What does it mean for the Fed?

The Fed may not be able to continue its inflation fight without risking further weaknesses in the job market.

The economy is close to triggering the ‘Sahm Rule,’ which states that if the current three month average of unemployment rate exceeds the lowest three month unemployment rate of the past year by 50bps, then the economy is close to a recession.

Given the state of the economy, the Fed may have to cut interest rates later.

Private Equity

Ardian agreed to acquire a majority stake in DIAM, a provider of visual merchandising and shop-fitting solutions for the beauty and luxury sectors.

Initial Public Offerings

Eureka Acquisition, an Asia-focused SPAC led by Fen Zhang, raised $50M in its IPO.

Venture Capital

Runway, an AI video startup, seeks to raise $450M led by General Atlantic.