Edgar Bronfman, Jr.
Cameron Costa | CNBC
The future of Paramount Global still uncertain
Paramount Special Committee on Wednesday said it would extend an agreed “shopping trip” by 15 days. timing of merger deal with Skydance amid competing offer from Edgar Bronfman Jr.
Bronfman initially offered $4.3 billion late Monday for National Amusements, owned by Shari Redstone, Paramount’s controlling shareholder, according to a person familiar with the bidding. As part of the bid, Bronfman would have acquired a minority stake in Paramount. But after making the bid, Bronfman raised additional money to support a higher bid, said the person, who asked not to be identified discussing specifics of the bidding.
Bronfman increased his bid on Wednesday, offering a revised price of $6 billion, the person said.
This offer would appear to replace Paramount. merger agreement with Skydance Media, which was announced in early July and ended months of negotiations. The deal includes a 45-day “go shop” period during which Paramount can solicit other offers.
Bronfman’s representative declined to comment.
The special committee confirmed on Wednesday that it “received a takeover proposal from Edgar Bronfman, Jr., on behalf of a group of investors.”
“Therefore, the ‘go shop’ period is extended for Bronfman Consortium until September 5, 2024, subject to the transaction agreement, with which the Company remains subject,” The commission said in a statement. “There is no assurance that this process will result in an Optimal Proposal. The Company does not intend to disclose further developments unless and until the Company determines that such disclosure is appropriate or required.”
The commission added that during the initial “go-shop” phase, it had contacted more than 50 third parties to assess potential acquisition interest. The commission said the go-shop phase would still expire by midnight Wednesday for all other parties.
The Skydance buying group, which also includes private equity firms RedBird Capital Partners and KKR, has agreed to invest more than $8 billion in Paramount and acquire National Amusements. The deal gives National Amusements an enterprise value of $2.4 billion, including $1.75 billion in equity.
Under the deal with Skydance, Paramount class A shareholders will receive $23 in cash or stock, and class B shareholders will receive $15 per share, representing a total cash consideration of $4.5 billion for public shareholders. Skydance also agreed to inject $1.5 billion in capital into Paramount’s balance sheet.
National Amusements owns 77% of Paramount’s Class A stock and 5% of its Class B stock. If the Skydance transaction closes, it will own all of Paramount’s Class A stock and 69% of its Class B stock outstanding.
Bronfman’s initial proposal called for National Amusements to be acquired in a $1.75 billion equity deal. That proposal included a $1.5 billion investment in Paramount’s balance sheet, similar to the Skydance deal, and also included covering the $400 million breakup fee Paramount would owe Skydance if it walked away from the deal, according to people familiar with the matter.
The attractive bid offered on Wednesday now includes $1.7 billion for a tender offer that would give non-Redstone and non-voting Paramount shareholders the option to receive $16 a share, the person added.
Bronfman previously ran Warner Music and the Seagram liquor company and also served as executive chairman of Fubo TV since 2020. Details of his bid are the first reported by The Wall Street Journal.
The merger deal between Paramount and Skydance has caught the attention of shareholders. Money manager Mario Gabelli reported has filed a lawsuit demanding that Paramount turn over its books related to the Skydance deal — a first step that could lead to a lawsuit challenging the deal. Investor Scott Baker reported sued to block the deal, arguing it would cost shareholders $1.65 billion.
