Edgar Bronfman, Jr.
Cameron Costa | CNBC
Edgar Bronfman Jr.’s offering for participation control Paramount Global could keep Shari Redstone close to the company if his bid is successful.
Bronfman is open to Redstone, currently Paramount’s non-executive chairman, continuing to be involved with the company if Paramount’s special committee accepts his joint venture’s offer for National Amusements, the controlling shareholder, according to a person familiar with the matter. knows the subject.
Bronfman raised $6 billion to challenge Skydance Media for ownership of National Amusements, the holding company founded by Sumner Redstone, according to people familiar with the matter. Both Bronfman’s and Skydance’s bids will also include money to buy out a percentage of Paramount Global’s common stock.
At $6 billion, Bronfman’s offer would give cash to about 20 percent of Class B holders at $16 a share. Skydance will pay about 50 percent of Paramount’s current common investors at $15 a share as part of its offer, according to the people.
It’s unclear whether Redstone prefers one offer over the other. Paramount Global’s special committee will determine whether Bronfman’s offer is a better proposition for shareholders by August 28. If the committee decides Bronfman’s offer is better, Skydance will then have four business days to match. The deadline for completing the entire process is September 5th.
Bronfman still has a few days to raise more money for a competing bid to take on Skydance, which agreed to an $8 billion deal to merge with Paramount Global last month. The special committee earlier this week extended the so-called “go-shop” period — during which it could entertain competing offers — by 15 days to consider Bronfman’s initial offer.
One of the people involved in Bronfman’s bid is former AOL CEO Jon Miller, suggesting that Redstone could potentially have more control over a future Paramount Global than it would with Skydance. Miller, a close Redstone ally, has connected Bronfman to potential funds and would likely take a role with the company if it were under Bronfman’s management — perhaps a board seat and an operations position — according to people familiar with the matter. Bronfman would be CEO of the company if his deal is accepted and goes through, the people said.
Miller, Redstone and Redstone’s son-in-law Jason Ostheimer jointly run Advancit Capital, a small venture capital firm that invests in media and technology. The trio are the only three people shown company website. Miller also served as Redstone’s de facto strategic adviser for several years, according to people familiar with the matter.
Redstone has not spoken to Miller about the offer, according to people familiar with the matter.
While the Redstone family and the Bronfman family have run in similar circles, including donating to Jewish foundations, Edgar Bronfman Jr. and Shari Redstone have not met many times and do not have a close pre-existing relationship, two of the people said.
Skydance CEO David Ellison and Redstone have had several discussions about the possibility of Redstone remaining as a shareholder in a combined Skydance-Paramount Global, according to people familiar with the matter.
Redstone is taking a wait-and-see approach to any future stake it might want to have in Paramount Global, regardless of its ownership, according to a person familiar with its thinking.
Representatives for Redstone, Bronfman, Paramount Global and Skydance declined to comment.
11th hour offer
Bronfman has spent the past few weeks courting people interested in owning a piece of Paramount Global, including film producer Steven Paul and Patron co-founder John Paul DeJoria, who had previously considered an offer of their own, according to a person familiar with the process. . as well as Fortress Investment Group, the credit arm of private equity firm BC Partners, and former Turner Broadcasting CEO John Martin.
Bronfman’s funding comes from many different sources, which could raise regulatory concerns if too much of the money comes from foreign entities. Having so many different backers may also make Bronfman’s bid riskier than that of Skydance, which is backed by private equity firm RedBird Capital and multi-billionaire Larry Ellison, father of David Ellison.
Bronfman is its president Fubo, a sports streaming service and the former head of Universal and Warner Music.
Skydance’s lawyers have sent a letter to Paramount Global’s special committee demanding that the company cease negotiations with Bronfman, The Wall Street Journal reported on Thursday. Skydance said Paramount Global violated the terms of the go-shop agreement by not notifying Skydance that it planned to extend the window, the report said.
Skydance also argued that the special committee did not have the right to extend the go-shop because a bid should “reasonably be expected to result in a superior proposal.” Skydance argued that Bronfman’s bid did not meet the criteria.
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