Shari Redstone's National Amusements Inc. has tentatively agreed to sell its controlling stake in Paramount Global to David Ellison's Skydance Media, three people familiar with the matter told Reuters on Tuesday.
The news caused Paramount's stock price to jump 9% in after-hours trading.
Under the provisional deal, Skydance will pay $1.75 billion for National Amusements' 77% voting stake in Paramount. The agreement includes a 45-day "shopping period" during which other bidders can submit offers, according to The Wall Street Journal, which first reported the news on Tuesday.
Other parties expressing interest in acquiring National Amusements include filmmaker Steven Paul, Seagram heir Edgar Bronfman Jr., and IAC's Barry Diller.
A source connected to one of the potential bidders said other bidders are unlikely to abandon their efforts, partly because they may present offers more favorable to Paramount shareholders or Redstone herself.
According to two people familiar with the situation, National Amusements has submitted the Skydance deal for review by Paramount's special board committee. The Wall Street Journal reported that under the new terms, National Amusements is no longer requiring majority approval from non-Redstone shareholders for the merger, which was a previous sticking point.
The sale is envisaged as the first part of a two-stage transaction, wherein the smaller independent studio Skydance will merge with Paramount, which owns the eponymous film studio, CBS, and cable networks like MTV and Nickelodeon.
Paramount Pictures, over a century old, is known for films such as "Titanic," "The Godfather," and the "Transformers" series. Skydance has co-produced movies with Paramount, including "Top Gun: Maverick" and "Star Trek Into Darkness."
