Paramount Global‘s stock slumped 8% on Thursday after CNBC’s David Faber reported the company would need to raise as much as $3 billion in new equity if it were to merge with David Ellison’s Skydance Media, according to sources familiar with the deal.
This deal comes as media mogul Shari Redstone, the controlling shareholder of Paramount, is said to be in exclusive talks with Ellison on selling her stake to him, according to Bloomberg. The companies have also reportedly entered exclusive merger discussions.
Faber said Ellison and his partners would likely step up to provide a good amount of that equity, but it would be dilutive.
The news comes as the Wall Street Journal reported that Apollo Global Management made a $26 billion all-cash offer for Paramount that was rejected, though Redstone has not found any interest in this deal.
Paramount’s stock had jumped sharply in trading Wednesday after those reports.
Redstone is looking to sell Paramount, as the company has been in talks with Warner Bros Discovery on acquiring the company. The MTV and CBS parent company has a market capitalization of nearly $10 billion and about $13 billion of net debt.
