Edgar Bronfman, Jr.
Cameron Costa | CNBC
His future Paramount Global is still uncertain.
Paramount special committee on Wednesday said he would extend by 15 days an agreed “go shop” period of its merger agreement with Skydance as it considers a competing offer from Edgar Bronfman Jr.
Bronfman initially offered $4.3 billion late Monday for Shari Redstone’s National Amusements, the controlling shareholder of Paramount, according to a person familiar with the offer. As part of the offer, Bronfman would acquire a minority stake in Paramount. But after the bid was submitted, Bronfman raised more capital to support a higher offer, said the person, who asked to remain anonymous to discuss the details of the bid.
On Wednesday, Bronfman upped the offer and submitted a revised offer of $6 billion, the person said.
The offer appears to replace Paramount’s merger agreement with Skydance Media, which came to an end in early July and ended a months-long negotiation process. The deal included a 45-day “go shop” period during which Paramount could solicit other offers.
A representative for Bronfman declined to comment.
The special committee confirmed Wednesday “the receipt of a takeover proposal from Edgar Bronfman, Jr., on behalf of a consortium of investors.”
As a result, the ‘go shop’ period is extended for the Bronfman Consortium until September 5, 2024, pursuant to the transaction agreement to which the Company remains subject,” the committee said in a statement. “There can be no assurance that this process will result in a Superior Proposal. The Company does not intend to disclose further developments unless and until it determines that such disclosure is appropriate or otherwise required.”
The committee added that during the initial “go shop” period it contacted more than 50 third parties to gauge potential acquisition interest. The sales period will still end before midnight on Wednesday for all other parties, the committee said.
The Skydance buying consortium, 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.
As part of the Skydance deal, Paramount’s Class A shareholders would receive $23 apiece in cash or stock, and Class B shareholders would receive $15 per share, equating to a total of $4.5 billion in cash consideration available to public shareholders. Skydance also agreed to inject $1.5 billion of capital into Paramount’s balance sheet.
National Amusements owns 77% of Paramount’s Class A shares and 5% of its Class B shares. If the Skydance transaction closes, it will own all of Paramount’s Class A shares and 69% of its existing Class B shares.
Bronfman’s original bid proposed buying National Amusements in a stock deal valued at $1.75 billion. That offer included a $1.5 billion investment on Paramount’s balance sheet, like the Skydance deal, and also included covering the $400 million breakup fee Paramount would owe Skydance if it pulled out of the deal, according to the person. .
The sweetened offer made Wednesday now includes $1.7 billion for an auction that would give Paramount’s non-voting Redstone shareholders the option to receive $16 a share, the person added.
Bronfman ran previously Warner Music and the Seagram beverage company and has also served as its executive chairman Fubo TV from 2020. Details of his offer were first was mentioned from the Wall Street Journal.
The merger deal between Paramount and Skydance has attracted scrutiny from shareholders. Money manager Mario Gabelli according to information filed a lawsuit seeking Paramount to hand over its books related to the Skydance deal — a possible first step toward a lawsuit challenging the deal. Investor Scott Baker according to information sued to block the deal, arguing it would cost shareholders $1.65 billion.
