Business
Sony and Apollo make formal $26-billion joint bid for Paramount
Sony Pictures Entertainment and Apollo Global Management have officially put in a bid for Paramount Global, as competition for the storied film and TV company continues to heat up.
Sony and Apollo submitted their $26-billion all-cash offer this week, according to a person familiar with the matter who was not authorized to comment.
Under the terms of the proposed deal, Sony would take a majority shareholder role in the company, with Apollo as a minority shareholder. The joint bid is a nonbinding expression of interest.
The companies do not see regulatory approval as a hurdle to the deal, the person said, even though it would lead to the combination of two of Hollywood’s major movie studios.
Apollo already owns a minority stake in “Dune” producer Legendary Entertainment. The deal could run up against Federal Communications Commission rules that restrict foreign ownership of broadcast TV stations, so Paramount’s CBS station group likely would have to be sold or licensed to Apollo, which already controls Atlanta-based Cox Media Group.
Culver City-based Sony Pictures is owned by Tokyo-based Sony Corp., the electronics giant behind the PlayStation video game system.
The bid comes as Paramount nears the end of a 30-day exclusive negotiating period on Friday with tech scion David Ellison’s Skydance Media, which recently sweetened its takeover offer after outcry from shareholders, who saw the original bid as dilutive to their shares.
Ellison has teamed up with investment firms RedBird Capital Partners and KKR to make a bid to acquire Paramount controlling shareholder Shari Redstone’s National Amusements holding company.
The complicated two-step proposition would involve Paramount acquiring Skydance Media and Ellison taking control of Paramount, including the storied Melrose Avenue Paramount studio lot, broadcast network CBS and various cable channels such as MTV and Comedy Central.
Skydance’s revised offer includes a cash infusion for Paramount and money earmarked for nonvoting shareholders, who have raised concerns that the prior bid would benefit the Redstone family at their expense.
On Monday, Paramount ousted chief executive Bob Bakish, who was known to have opposed the Skydance proposal. His opposition irked Redstone, who also had questioned some of Bakish’s business decisions, including not selling cable network Showtime, according to people familiar with the situation.
The company said three of its top entertainment executives would jointly run the firm: Paramount Pictures CEO Brian Robbins; CBS CEO George Cheeks; and Showtime/MTV Entertainment Studios chief Chris McCarthy.
Analyst Jamie Lumley at financial research firm Third Bridge described the bid as Sony and Apollo’s best attempt to make Paramount an offer it couldn’t refuse, though it could be futile at this point.
“Ultimately, this offer could be coming in after the 11th hour if the sweetener Skydance added in last weekend is enough to get a deal over the line,” Lumley wrote in a statement. “With the exit of Bob Bakish as CEO, Paramount is likely looking to finalize a deal as soon as possible as it plots a path forward for its beleaguered business.”
Shares of Paramount were up 12.5% to $13.80 around 12:30 p.m. PDT on Thursday.
Adding to the complications, Paramount also is in negotiations with Charter Communications to work out a new deal for carriage of the company’s TV channels. Paramount is heavily reliant on the fees it reaps from its TV stations, despite flagging ad revenue and increasing cord cutting. The outcome of these negotiations could factor into Paramount’s valuation in the event of a sale.
Business
Heidi O’Neill, Formerly of Nike, Will Be New Lululemon’s New CEO
Lululemon, the yoga pants and athletic clothing company, has hired a former executive from a rival, Nike, as its new chief executive.
Heidi O’Neill, who spent more than 25 years at Nike, will take the reins and join Lululemon’s board of directors on Sept. 8, the company announced on Wednesday.
The leadership change is happening during a tumultuous time for Lululemon, which had grown to $11 billion in revenue by persuading shoppers to ditch their jeans and slacks for stretchy leggings. But lately, sales have declined in North America amid intense competition and shifting fashion trends, with consumers favoring looser styles rather than the form-fitting silhouettes for which Lululemon is best known.
“As I step into the C.E.O. role in September, my job will be to build on that foundation — to accelerate product breakthroughs, deepen the brand’s cultural relevance, and unlock growth in markets around the world,” Ms. O’Neill, 61, said in a statement.
Lululemon, based in Vancouver, British Columbia, has also been entangled in a corporate power struggle over the company’s future. Its billionaire founder, Chip Wilson, has feuded with the board, nominated independent directors and criticized executives.
Lululemon’s previous chief executive, Calvin McDonald, stepped down at the end of January as pressure mounted from Mr. Wilson and some investors. One activist investor, Elliott Investment Management, had pushed its own chief executive candidate, who was not selected.
The interim co-chiefs, Meghan Frank and André Maestrini, will lead the company until Ms. O’Neill’s arrival, when they are expected to return to other senior roles. The pair had outlined a plan to revive sales at Lululemon, promising to invest in stores, save more money and speed up product development.
“We start the year with a real plan, with real strategies,” Mr. Maestrini said in an interview this year. “We make sure decisions are made fast.”
Lululemon said last month that it would add Chip Bergh, the former chief executive of Levi Strauss, to its board to replace David Mussafer, the chairman of the private equity firm Advent International, whom Mr. Wilson had sought to remove.
Ms. O’Neill climbed the organizational chart at Nike for decades, working across divisions including consumer sports, product innovation and brand marketing, and was most recently its president of consumer, product and brand. She left Nike last year amid a shake-up of senior management that led to the elimination of her role.
Analysts said Ms. O’Neill would be expected to find ways to energize Lululemon’s business and reset the company’s culture in order to improve performance.
“O’Neill is her own person who will come with an agenda of change,” said Neil Saunders, the managing director of GlobalData, a data analytics and consulting company. “The task ahead is a significant one, but it can be undertaken from a position of relative stability.”
Business
Angry Altadena residents ask officials to halt Edison’s undergrounding work
Eaton wildfire survivors’ anger about Southern California Edison’s burying of electric wires in Altadena boiled over Tuesday with residents calling on government officials to temporarily halt the work.
In a letter to the Los Angeles County Board of Supervisors, more than 120 Altadena residents and the town’s council wrote that they had witnessed “manifest failures” by Edison in recent months as it has been tearing up streets and digging trenches to bury the wires.
The residents cited the unexpected financial cost of the work to homeowners and possible harm to the town’s remaining trees. They also pointed out how the work will leave telecommunication wires above ground on poles.
“The current lack of coordination is compounding the stress of a community still reeling from the Eaton Fire, and risks causing further irreparable harm,” the residents wrote.
The council voted unanimously Tuesday night to send the letter.
Scott Johnson, an Edison spokesman, said Wednesday that the company has been working to address the concerns, including by looking for other sources of funds to help pay for the homeowners’ costs.
“We recognize this community has already faced a number of challenges,” he said.
Johnson said the company will allow homeowners to keep existing overhead lines connecting their homes to the grid if they are worried about the cost.
Edison’s crews, Johnson said, have also been trained to use equipment that avoids roots and preserves the health of trees.
The utility has said that burying the wires as the town rebuilds thousands of homes destroyed in the fire will make the electrical grid safer and more reliable.
But anger has grown as work crews have shown up unexpectedly and residents learned they’re on the hook to pay tens of thousands of dollars to connect their homes to the buried lines.
Residents have also found the crews digging under the town’s oak and pine trees that survived last year’s fire. Arborists say the trenches could destroy the roots of some of the last remaining trees and kill them.
Amy Bodek, the county’s regional planning director, recently warned Edison that a government ordinance protects oak trees and that “utility trenching is not exempt from these requirements.”
Residents have also pointed out that in much of Altadena, the telecom companies, including Spectrum and AT&T, have not agreed to bury their wires in Edison’s trenches. That means the telecom wires will remain on poles above ground, which residents say is visually unappealing.
“While our community supports the long-term benefits of moving utilities underground, the current execution by SCE is placing undue financial and planning burdens on homeowners, causing irreparable harm to our heritage tree canopy, and proceeding without adequate local oversight,” the residents wrote.
They want the project halted until the problems are addressed.
Edison announced last year that it would spend as much as $925 million to underground and rebuild its grid in Altadena and Malibu, where the Palisades fire caused devastation.
The work — which costs an estimated $4 million per mile — will earn the utility millions of dollars in profits as its electric customers pay for it over the next decades.
Pedro Pizarro, chief executive of Edison International, told Gov. Gavin Newsom last year that state utility rules would require Altadena and Malibu homeowners to pay to underground the electric wire from their property line to the panel on their house. Pizarro estimated it would cost $8,000 to $10,000 for each home.
But some residents, who need to dig long trenches, say it will cost them much more.
“We are rebuilding and with the insurance shortfall, our finances are stretched already,” Marilyn Chong, an Altadena resident, wrote in a comment attached to the letter. “Incurring the additional burden of financing SCE’s infrastructure is not something we can or should have to do.”
Other fire survivors complained of Edison’s lack of planning and coordination with residents.
“I’ve started rebuilding, and apparently there won’t be underground power lines for me to connect with in time when my house will be done,” wrote Gail Murphy. “So apparently I’m supposed to be using a generator, and for how long!?”
Johnson said the company has set up a phone line for people with concerns or questions. That line — 1-800-250-7339 — is answered Monday through Saturday, he said.
Residents can also go to Edison’s office in Altadena at 2680 Fair Oaks Avenue. The office is open Monday to Friday from 8 to 4:30.
It’s unclear if the Eaton fire would have been less disastrous if Altadena’s neighborhood power lines had been buried.
The blaze ignited under Edison’s towering transmission lines that run through Eaton Canyon. Those lines carry bulk power through the company’s territory. In Altadena, Edison is burying the smaller distribution lines, which carry power to homes.
The government investigation into the cause of the fire has not yet been released. Pizarro has said that a leading theory is that a century-old transmission line, which had not carried power for 50 years, somehow re-energized to spark the blaze.
The fire killed at least 19 people and destroyed more than 9,400 homes and other structures.
Business
Oil Prices Rise as Investors Weigh Cease-Fire Extension
Oil prices rose and stocks moved slightly higher on Wednesday as investors tried to make sense of President Trump’s decision to extend the cease-fire with Iran despite doubts about the status of another round of peace talks.
An adviser to Mohammad Bagher Ghalibaf, the influential speaker of the Iranian Parliament, dismissed the cease-fire announcement, saying that it had “no meaning.” He equated the U.S. naval blockade with bombings, with commercial vessels coming under attack near the Strait of Hormuz, the crucial shipping lane that has been at the center of a growing energy crisis.
-
Detroit, MI8 minutes agoThings to do in Metro Detroit, April 24 and beyond
-
San Francisco, CA20 minutes agoCA to open 3 new state parks and expand others, including in Bay Area: Here’s where
-
Dallas, TX26 minutes agoWild vs. Stars Game 3: Key takeaways as Dallas takes series lead on Wyatt Johnston’s 2OT winner
-
Miami, FL32 minutes agoMiami-Dade deputies detain elderly father who they say shot and killed his son after a domestic dispute
-
Boston, MA38 minutes agoBoston has one of the best public markets in the country, says USA TODAY
-
Denver, CO44 minutes agoRed flag fatigue? Colorado sees near-record number of critical fire days
-
Seattle, WA50 minutes agoFOLLOWUP: West Seattle pickleball players band together to save court access
-
San Diego, CA56 minutes agoPadres sign Giolito to 1-year deal with option for '27