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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Skydance and Shari Redstone’s holding company are offering a $3bn investment in Paramount in an effort to win support for a complex merger that has frustrated investors and led to the departure of the Hollywood group’s chief executive.

The offer, which includes $2bn in cash to common shareholders, came as Paramount chief executive Bob Bakish resigned on Monday, raising new questions about the future of the Hollywood group behind The Godfather. 

Redstone said on Monday: “The board and I thank Bob for his many contributions over his long career . . . we wish him all the best.”

Redstone and Paramount’s board, which she chairs, have been trying to agree a deal to merge the company with David Ellison’s Skydance, the production company backed by his billionaire father, Larry Ellison, as well as RedBird Capital and KKR. 

Under the latest terms of the deal, Skydance would buy Redstone’s National Amusements for less than $2bn, not as much as previously discussed between the two sides, said people briefed about the matter.

Those people added that Paramount would then merge with Skydance, valuing Ellison’s company at about $5bn in an all-stock deal. The combination would value the existing common shares of Paramount about 30 per cent above its current trading share price.

The Ellison-led consortium would also invest a further $3bn in the combined company, the people said. Two-thirds of the investment would pay cash to holders of common shares by buying back their stock, with the remainder used to reduce Paramount’s debt.

Shareholders would have the option to either sell their shares in Paramount or keep the stock of the combined company, or a combination of the two, as the buyback would be limited to a maximum amount of $2bn. Paramount’s Class B common shares have a current market capitalisation of about $7bn.

Paramount has a dual-class shareholding structure. Redstone’s NAI controls nearly 80 per cent of voting rights, but holds only 10 per cent of equity ownership. Many Paramount shareholders baulked at a previously proposed merger structure, which they argued would benefit Redstone at the cost of common shareholders. 

Redstone would remain an investor in the combined Paramount-Skydance, a move that aims to show her conviction that the Ellison-led group would turn round the fortunes of Paramount, which has struggled to compete with larger rivals such as Netflix in an expensive “streaming war”.

“There will be more alignment between [Redstone’s] interest and shareholders than before,” said one person familiar with the arrangement.

The Paramount board has set up a special committee to evaluate the plan.  

Paramount on Monday said a team of three executives — George Cheeks, Chris McCarthy and Brian Robbins — would replace Bakish, establishing an “office of the CEO”.

Bakish, who had worked at the company and its predecessor Viacom for a quarter of a century, had previously been an ally of Redstone, who promoted him to chief executive of Viacom in 2016. But their relationship has deteriorated in recent months, according to several people familiar with the matter.

Bakish was paid a total of $31.5mn in 2023, according to a regulatory filing. 

Private equity group Apollo, in partnership with rival studio Sony, is also preparing to bid on Paramount as soon as this week, according to people familiar with the situation. Paramount recently rejected Apollo’s $26bn all-cash offer, and four members of the Paramount board have since withdrawn their names for re-election in June.

Paramount on Monday reported a net loss of $554mn on $7.7bn in revenue in the first quarter. The company did not take questions on its earnings call, which lasted less than 10 minutes.

“There’s no dressing this up — looks like a car crash with clear divisions among key stakeholders,” said analyst Paolo Pescatore at PP Insights.

“The latest chapter in this ongoing saga looks to be taking another turn for the worse.”

The winners of Oregon’s largest-ever lottery jackpot — and the eighth-largest lottery win in the history of the United States — are Laiza Liem Chao, 55, of Milwaukie, and Cheng Saephan, 46, and Duanpen Saephan, 37, of Portland.

The Oregon Lottery announced their names with great fanfare in Salem on Monday.

“First, I want to thank God for giving me this beautiful prize,” said Cheng Saephan, the only winner to attend the official announcement at Oregon Lottery headquarters in Salem.

Cheng Saephan, his wife and Chao already have been paid, the couple and their friend splitting the $422,309,193.97 that remained of the $1.326 billion prize after state and federal taxes, lottery spokesperson Melanie Mesaros said. They opted for the one-time payout rather than the 30-year annuity, which also brought the amount down.

Cheng Saephan, who was born in Laos and moved to the United States from Thailand in 1994, said he is especially grateful that he will be able to provide a comfortable life for his family, which includes two children he has with his wife. As for himself, he doesn’t believe he’ll have that much time to enjoy his winnings because he is in the midst of battling cancer. He was first diagnosed in 2016, he said. His most recent chemotherapy treatment was a week ago.

“How am I going to have time to spend all of this money?” Cheng Saephan said.

Cheng Saephan said he, his wife and their friend Chao bought 20 lottery tickets for $200. For several months before the big win he said he felt like he was going to win something — but he expected no more than several million, he said, not a jackpot in excess of $1 billion. He plans to buy a house with the money, he said.

He used to be a machinist working on airplane parts, he said.

Cheng Saephan said he told his friend and co-winner Chao about the big win over the phone. He asked her what she was doing and she said she was driving to work.

“You don’t have to work now,” Cheng Saephan said he told her.

A man at the Salem event who identified himself as Cheng Saephan’s pastor said Saephan agreed to send him on missionary trips to Thailand, Laos and possibly China.

The historic winning Powerball ticket was sold at a Plaid Pantry convenience store in Northeast Portland. The store will get a $100,000 bonus for selling the winning ticket, the Oregon Lottery said.

“I want to offer my heartfelt congratulations to the Saephans and Ms. Chao on this historic win,” Oregon Lottery Director Mike Wells said in a statement. “Not only is the prize life-changing for the three of them and their families, it’s also a huge win for the state.”

— Fedor Zarkhin is a breaking news and enterprise reporter with a focus on crime. Reach him at 971-373-2905; fzarkhin@oregonian.

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Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

German inflation rose slightly more than forecast in April on the back of strong food and energy prices in Europe’s largest economy, curbing investors’ hopes of a string of interest rate cuts this year.

Consumer prices in Germany increased 2.4 per cent in the year to April, rising from 2.3 per cent a month earlier, according to EU harmonised data released by the federal statistical agency Destatis on Monday. Economists polled by Reuters had expected a flat reading.

However, excluding underlying energy and food prices, Destatis reported core inflation had fallen from 3.3 per cent to 3 per cent.

With Spain reporting a similar uptick in headline inflation coupled with a cooling of core price growth, the German figures chipped away at investors’ confidence about the extent of European Central Bank rate cuts this year.

The uptick in German inflation was “a good reminder of how difficult the last mile of bringing inflation sustainably back to 2 per cent will be for the ECB”, said Carsten Brzeski, an economist at ING.

Government bond yields, which move inversely to their prices, rose slightly on the news as investors trimmed their bets that the ECB will start cutting rates in just over a month. Despite the rise, Germany’s benchmark 10-year bond yield was still down almost 5 basis points at 2.53 per cent.

Senior ECB policymakers have said they are likely to cut rates for the first time in five years at their next policy meeting on June 6 as long as wages and price pressures keep cooling in line with their forecasts for inflation to drop to the bank’s 2 per cent target by next year.

A June rate cut by the ECB “still looks like a done deal”, Brzeski said.

Eurozone inflation is expected to remain flat at 2.4 per cent, while core inflation in the bloc is expected to fall from 2.9 per cent to 2.7 per cent when that data is released on Tuesday.

Any overshoot could cause traders to doubt whether the ECB will start cutting rates in June, especially after hotter than forecast US inflation prompted them to reduce bets on the scale of Federal Reserve easing this year.

Recent business and consumer surveys show the eurozone economy is tentatively emerging from its recent stagnation and data on Tuesday is expected to show gross domestic product in the region expanded at a quarterly rate of 0.2 per cent in the three months to March.

But despite economic activity improving, most economists expect the fact that Easter was in March rather than April this year to lower airfare and package holiday prices in the past month, bringing down eurozone services inflation for the first time in six months.

The earlier Easter seemed to contribute to lower German services inflation, which fell back to 3.4 per cent, having accelerated to 3.7 per cent in March.

Ralph Solveen, an economist at Commerzbank, predicted that German inflation would rise later this year “as companies in the service sectors in particular will pass on the massive rise in wage costs to their customers”.

Destatis said energy prices fell 1.2 per cent in April — a much smaller annual decline than the drop of 2.7 per cent recorded in March — while food prices rose 0.5 per cent after falling the previous month.

Spain’s statistics office said rising gas and food prices — after the removal of government subsidies — helped to push up its inflation rate to 3.4 per cent in April, compared with 3.3 per cent a month earlier. But core inflation, excluding energy and fresh food, slowed from 3.3 per cent to 2.9 per cent.