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Entertainment conglomerate is putting on pause any conversations with other bidders for 30 days

Members of Paramount Global’s PARA 14.97%increase; green up pointing triangle board agreed to enter exclusive merger discussions with Skydance, favoring it over a recent $26 billion all-cash offer from private-equity firm Apollo Global Management APO 1.84%increase; green up pointing triangle.

The move means the entertainment conglomerate is putting on pause any conversations with other bidders for 30 days while it tries to work out a deal with Skydance, a production company led by David Ellison, people familiar with the matter said.

The decision could give Skydance an edge over Apollo, which earlier had offered $11 billion for Paramount’s movie studio, but on Sunday offered to buy the entire company for $26 billion, including debt.

Paramount’s directors opted to move forward with Skydance as it wasn’t clear how Apollo would finance its bid, said some of the people. People close to the Apollo bid said the private-equity firm wouldn’t need additional debt financing to buy Paramount because its existing capital structure could be rolled into a new deal.

Shari Redstone, Paramount Global’s controlling shareholder, has been in talks with Ellison to sell National Amusements, her family’s media empire that owns about 77% of the voting shares of Paramount, since late last year.

The two have already agreed to terms, but Skydance has made it clear that to close that deal, it needs to make sure that it is allowed to merge their studios. Skydance has partnered with Paramount on such movies as “Top Gun: Maverick” starring Tom Cruise.

Merging the studios requires a second deal between Paramount and Skydance that has to be approved by an independent committee of directors at Paramount. That committee must approve that the deal is good for all shareholders, not just National Amusements. Paramount’s management, including Chief Executive Bob Bakish, isn’t being included in the decision-making, some of the people said.

The New York Times earlier reported that Skydance and Paramount were discussing entering exclusivity.

Ellison, Skydance’s CEO, is the son of billionaire Larry Ellison, the co-founder of Oracle, who is expected to help fund a deal, the Journal previously reported.

Skydance is backed by investors including Ellison’s father; private-equity firms RedBird Capital Partners and KKR, as well as Chinese tech investment giant Tencent. Skydance in 2022 raised $400 million in new capital, valuing it at more than $4 billion. Paramount, whose stock has lost nearly half of its value in the past year, has a market capitalization of about $8 billion.

Investors support company’s slate of board nominees; Peltz loses bid to become a director in win for the Disney CEO

Disney DIS -3.13%decrease; red down pointing triangle defeated activist shareholder Nelson Peltz in a bruising fight for influence in the entertainment giant’s boardroom, handing Chief Executive Bob Iger a major victory over one of Wall Street’s most aggressive investors.

The company said Wednesday that shareholders voted to elect its entire slate of board nominees, while Peltz, who has argued Disney needs a fresh voice to hold management accountable, lost his bid to become a director.

Disney said its slate of 12 directors won shareholder support “by a substantial margin,” according to preliminary results.

The outcome of the vote leaves control of the boardroom firmly in the hands of Iger-friendly directors—all but one of whom were appointed on his watch. It also allows the company to return to a full-time focus on rebuilding Disney and addressing challenges from turning a profit on streaming to reinvigorating a studio business that has lost some of its magic.

“With the distracting proxy contest now behind us, we’re eager to focus 100% of our attention on our most important priorities: growth and value creation for our shareholders and creative excellence for our consumers,” Iger said.

He told shareholders at the meeting that the company is now on a more solid foundation, strengthened by its action over the past year. “We have turned the corner,” he said.

The results are a blow to Peltz’s Trian Partners, which has been trying to revive itself after investor withdrawals and a string of employee exits.

“We are proud of the impact we have had in refocusing this Company on value creation and good governance,” Trian said in a statement after the results. Speaking at the meeting, Peltz said the campaign had been his second at Disney: “We hope that this time will be our last.”

Shareholders threw their support behind Iger, with the CEO securing 94% of votes cast, while Disney director Maria Elena Lagomasino, whose seat Trian contested, won 63%, according to people familiar. Peltz won 31% of votes cast.

Retail investors—which represent more than a third of Disney shareholders—were particularly helpful. Some 75% of retail investors who cast votes backed the company’s slate.

Shares of Disney fell 3.1% in late-afternoon trading. Before Wednesday, the stock had risen 35% so far this year.

Iger on Wednesday showcased his strategy, pointing to an “incredibly robust slate” of films planned for coming years, including “Mufasa,” “Deadpool & Wolverine” and “Inside Out 2.” He touted a feature film sequel to “Moana” set for release in November and a new season of FX’s “The Bear,” a show that dominated this year’s Emmy Awards.

He said Disney plans to make the company’s stand-alone ESPN service available on its Disney+ as a bundled offering, as Hulu now is, and said the company is working on a raft of new experiences at its theme parks.

Priciest Proxy Fight Ever

The corporate showdown was expected to be the priciest proxy fight ever, pitting a titan of the entertainment industry and its blue-chip, celebrity CEO against a pit bull activist and his ally, a fired Marvel executive.

For Iger, who for years won near-universal praise in Hollywood and on Wall Street for his stewardship of Disney—including the vision to pursue deals that brought in franchises like Star Wars and Marvel—Peltz’s proxy fight was an unusual and irritating public rebuke.

Peltz had criticized many areas of Disney’s operations, including that it needed to be more like Netflix, its creative engines had stalled and its sports unit ESPN needed a better plan. However, the argument that resonated the most with investors was that Disney’s board had failed badly at finding a successor to Iger.

Despite Disney’s win, the fact it was such a hotly contested fight will put American corporations on notice: any board that fails to carry out proper succession planning could face a reckoning.

“It’s never a zero-sum game, where you simply win or you lose. A substantial vote for the other side is something that the company can’t ignore,” said Wei Jiang, a professor of finance at Emory University’s Goizueta Business School. The Disney-Trian fight stood out because of the focus on succession planning, a relatively rare bone of contention in activist campaigns, she said.

Iger and the Disney board are working on narrowing down a field of potential CEO successors. Iger’s contract runs to 2026, when he has promised to step down.

The top internal contenders include Dana Walden and Alan Bergman, co-chairs of Disney Entertainment, which includes the company’s television, streaming and studio units; Josh D’Amaro, chairman of Disney Experiences, which includes Disney’s lucrative theme parks; and Jimmy Pitaro, chairman of ESPN, which is in the throes of a high-stakes pivot to streaming.

Iger also must follow through on the various initiatives Disney put forward during the shareholder fight and show that they can deliver returns, including an online sports bundle to be launched alongside Fox and Warner Bros. Discovery.

In addition, there is more work ahead in carrying out longer-running initiatives to expand Disney’s sports streaming offerings with an ESPN direct-to-consumer app, while managing a broad structural decline in the cable TV business that has proved challenging to the company and its rivals. Disney also faces rising competition in theme parks, content streaming and family entertainment.

Musk Supports Peltz

Disney executives and board members, including Iger, visited major institutional shareholders in recent weeks, touting the company’s progress in moving toward streaming profitability and its plans to revitalize its studio—and arguing that it would be problematic and disruptive for the company and Iger if Peltz joins the board. Disney also ran a host of ads encouraging shareholders to support its slate of directors.

Individual investors were expected to have outsize sway, given that they hold more than one-third of shares. While Peltz led Lagomasino for votes in early voting, The Wall Street Journal reported, Disney was able to turn the tide, convincing large shareholders like BlackRock, Vanguard and T. Rowe Price to support its board nominees.

State Street, Disney’s third-largest shareholder, withheld support for incumbent directors Lagomasino and board Chair Mark Parker but decided not to support Trian’s slate, according to people familiar with the matter.

Another twist in this fight was the use of a so-called universal proxy card, which allowed shareholders to mix and match candidates when casting votes, rather than siding with an entire slate over another. This voting method likely played in Peltz’s favor, granting him more votes than he may have received otherwise, experts say.

Peltz, backed by his friend and former Marvel chairman Isaac “Ike” Perlmutter, who lent his more than 25 million shares to the fight, sought seats on the Disney board for himself and former Disney Chief Financial Officer Jay Rasulo. They ran for positions held by incumbent directors Lagomasino and Michael Froman.

Trian spent weeks traveling to meet with investors, at times seeing the same shareholders multiple times to make its case, portraying Disney’s board as complacent and beholden to the will of a CEO who struggles to let go.

As investors cast their votes, Peltz and Elon Musk discussed the possibility of the Tesla CEO weighing in to support Trian. Musk called some investors to help Peltz win votes and on Wednesday morning publicly endorsed him on Twitter.

Trian appears to have so far profited from its Disney investment, given that the stock has gone from well under $100 to around $121 since the hedge fund arrived.

A separate activist campaign by Blackwells Capital, which sought to add three board members, failed to get much traction in part because the firm held a comparatively small stake in Disney’s stock. Blackwells said Wednesday it achieved its primary objective—preventing Peltz from getting elected.

Financier backed out of 2020 deal to buy half of Global Champions citing financial difficulties caused by the pandemic

The family company of US billionaire Frank McCourt has obtained a court order to detain German financier Lars Windhorst for failing to comply with asset disclosure obligations in a dispute over a showjumping business.

In the latest legal setback for Windhorst, a Dutch court granted the order last month following an application by a subsidiary of McCourt Global, which was founded by former Los Angeles Dodgers owner McCourt.

In a judgment outlining the decision, the judge noted that the use of “physical coercion” to enforce a court decision should be used only as “a last resort” after other measures had failed to make debtors comply with a judgment.

McCourt Global’s sports division has been in a long-running legal dispute with Windhorst over the sale of its shares in an international show jumping competition to the German businessman’s holding company.

The dispute dates to 2020, when Windhorst’s Tennor Holding agreed to buy 50 per cent of show jumping business Global Champions for €169mn, but then tried to back out citing financial difficulties due to the pandemic.

Windhorst later agreed to proceed with the deal, but failed to comply with the payment terms relating to the share purchase, according to court records. McCourt Global’s sports division has since pursued Tennor and Windhorst through the courts.

The Amsterdam District Court in 2021 ordered Windhorst to disclose his assets to McCourt Global, which subsequently also obtained a court order to seize €151mn of assets linked to Windhorst’s businesses. In January, McCourt Global obtained an order allowing it to sell some of the shares of Tennor Holding’s subsidiaries. 

McCourt Global’s sports division argued that Windhorst had made it “impossible” to sell the shares it had been allowed to seize, according to the latest judgment, given in mid-March. 

Twenty minutes before a hearing at Amsterdam’s District Court in early March, Windhorst sent documents listing his assets to McCourt Global’s legal representatives, saying “he moved heaven and earth to make the information available”, according to the judgment. 

The judge in the case deemed it “completely unbelievable” that Windhorst had been unable to provide the documents to McCourt earlier than this, adding that the last-minute submission appeared to have been for “tactical reasons”, making it hard to assess if the necessary information had been provided. 

“The requested physical coercion is justified,” the judge wrote. “This cannot be changed by the fact that he provided information at the last minute.”

“The period during which the coercion can be enforced will be set at a maximum period of one year,” according to the judgment. The ruling means that if Windhorst travels to the Netherlands he could be arrested. There is no international arrest warrant attached to the court order. 

Jan Tops, a Dutch Olympic showjumping champion who founded the Global Champions business, now fully owns it, having taken over the 50 per cent stake at the centre of the original legal dispute.

Despite a patchy business record, Windhorst has raised billions of dollars from investment firms and wealthy individuals to fund his ventures over the past decade. Illiquid bonds linked to Windhorst’s companies were at the centre of a high-profile scandal at France’s H2O Asset Management.

The financier has spent much of the past year battling lawsuits brought by aggrieved creditors in London’s High Court. In the summer of 2023, he was found in contempt of court, hit with a €150mn freezing order and conceded under cross-examination that it was “difficult” to say whether he was solvent.

Several of his companies have had major financial difficulties and Tennor has not produced audited accounts since 2018.

The Dutch accountant who audited that year’s accounts was in January forbidden from practising for two years, after the Netherlands Chamber of Accountants found his “audit file was virtually empty” and that a professionally critical attitude was “completely lacking”.

Windhorst said: “We are in process of settling with all our creditors including McCourt and therefore looking forward to close this and other pending legal cases amicably soon.”

McCourt Global denied there were any ongoing settlement discussions. 

MILAN, April 3 (Reuters) - The automotive industry will have to reduce the weight of EV batteries by 50% in the next 10 years to make electrification environmentally meaningful, the head of Stellantis (STLAM.MI), opens new tab said on Wednesday.

Stellantis CEO Carlos Tavares said during the automaker's Freedom of Mobility Forum that making a battery pack for an electric vehicle (EV) with a "decent range" of 400 kilometres (250 miles) now took on average 1,000 pounds, or around 500 kilograms, of additional raw materials compared to a traditional car.

"From an environmental standpoint ... I don't think it makes sense," Tavares said.

The Stellantis CEO said the auto industry, based on new science, needed to achieve a "breakthrough" in terms of cells' power density.

"I think that's on the way. I think over the next decade we'll be able to reduce the battery pack weight by 50%, hence reducing by 50% the use of additional raw materials against a conventional vehicle," he said.

He added this would also help solve the problem of lithium scarcity, a key element in most of today's batteries.

Stellantis' Freedom of Mobility Forum - which on Wednesday held its second annual session - was set up by the group after it decided to leave European auto lobby group ACEA at the end of 2022. It is designed to promote discussions with stakeholders over covering the problems and trends of mobility and their implications for global warming.

During the forum Tavares also said he did not see hydrogen as a viable alternative technology for present mass mobility due to its "sky high" costs, even assuming that energy used to produce hydrogen was clean.

"I'm afraid that for the time being affordability is going to be a major showstopper for hydrogen," Tavares said. "For the near future, it's (possibly) going to be a solution for fleets of big corporations, but certainly not for normal citizens."

A slowdown in wage growth has eased worries that the economy is too hot

Stronger-than-anticipated economic activity this year hasn’t materially changed the Federal Reserve’s expectation that declining inflation will allow for interest-rate cuts this year, Chair Jerome Powell said Wednesday.

Powell pointed to signs that labor market conditions are less tight than they have been in recent years, which has eased concerns that paychecks and prices might rise in tandem.

Meantime, signs of firmer-than-expected inflation in January and February haven’t yet shaken the Fed’s view that price growth will continue to slow down despite some bumps, Powell said in remarks prepared for delivery at a conference in Stanford, Calif.

“The recent data do not…materially change the overall picture, which continues to be one of solid growth, a strong but rebalancing labor market, and inflation moving down to 2% on a sometimes bumpy path,” he said.

Fed officials raised rates rapidly over the past two years to address a surge in inflation, which hit a 40-year high. They have held their benchmark short-term rate in a range between 5.25% and 5.5% since July.

Measures of underlying inflation have cooled notably since the middle of 2023. That has allowed the Fed to shift its attention away from whether to keep raising rates and toward when to lower rates from a level that some officials thought was necessary to defend against inflation becoming stubbornly elevated.

Most officials continued to see at least three cuts as appropriate this year in projections submitted at their most recent meeting last month.

Officials are trying to guard against the risk of easing too much or too soon, squandering recent gains in bringing down inflation. They also don’t want to leave rates at levels that unnecessarily slow the economy and cause a serious downturn.

“As progress on inflation continues and labor market tightness eases, these risks continue to move into better balance,” Powell said.

Investors in interest-rate futures markets currently place slightly higher than a 50% chance that the Fed will cut rates at its meeting in mid-June. Fed officials’ next meeting is April 30-May 1.