After months of negotiation, Shari Redstone, the controlling shareholder of Paramount Global, has reportedly terminated talks with David Ellison's Skydance Media regarding a potential merger. Instead, Redstone is now considering deals with other parties interested in acquiring National Amusements Inc. (NAI), which holds a significant stake in Paramount Global.

According to the Wall Street Journal, Redstone and Ellison were unable to reach an agreement on the complex terms of the transaction that would have transferred control of Paramount Global to Skydance and its private-equity partners, RedBird Capital Partners and KKR. A representative for Skydance Media declined to comment on the matter.

As a result of the breakdown in negotiations, other potential suitors have emerged, expressing interest in acquiring NAI alone. Edgar Bronfman Jr. and Bain Capital are contemplating a bid of up to $2.5 billion for NAI, while producer and filmmaker Steven Paul has also expressed interest. These parties are considering separate deals, foregoing the inclusion of Paramount Global.

However, despite the failed merger talks and the potential interest from other parties, there are indications that Redstone may prefer Paramount Global to operate independently. At the recent shareholder meeting on June 4, the newly established Office of the CEO, comprising George Cheeks, Chris McCarthy, and Brian Robbins, outlined a strategy for Paramount Global's future success, focusing on cost reduction measures, potential asset sales, and collaborations with Paramount+.

To facilitate potential changes in ownership, Paramount extended change-in-control severance benefits to the three executives in the Office of the CEO- Cheeks, McCarthy, and Robbins. Additionally, these executives were granted bonuses for their service during this transitional period.

The decision to end merger talks with Skydance comes after Redstone ousted former CEO Bob Bakish, reportedly due to disagreements over pursuing a deal with Skydance. Skydance's most recent offer, approved by Paramount's special committee, proposed a payment of about $2 billion for NAI and offered Class B shareholders the option to cash in nearly half their shares at $15 per share. The consortium would have also contributed $1.5 billion to reduce Paramount's debt. The merger would have resulted in the consortium owning about two-thirds of Paramount's shares.

While Sony Pictures and Apollo Global Management had initially emerged as joint bidders for Paramount Global, offering $26 billion (including debt assumption) last month, they have since withdrawn from pursuing a full acquisition of the company.

As Redstone explores alternative avenues for NAI, the future of Paramount Global and its potential partnerships or acquisitions remains uncertain.