Paramount Global ‘s board has extended the go-shop window under its Skydance Media deal for 15 days as it engages with an investor group led by Edgar Bronfman Jr. , which on Wednesday proffered $6 billion to take control of the media conglomerate — up from $4.3 billion previously.
Bronfman and his backers on Wednesday made the higher bid to acquire National Amusements Inc., Paramount’s controlling shareholder, and added a deal sweetener — offering a pool of $1.7 billion to give Paramount nonvoting shareholders a $16/share buyout premium for a portion of their stock, sources confirmed to Variety .
The Bronfman-led group originally offered $4.3 billion and had not offered to acquire any of Paramount Global’s nonvoting stock. The move puts on hold, for now, the deal with David Ellison’s Skydance Media that would see Skydance merge with Paramount.
Bronfman’s raised bid for NAI and Paramount was first reported by the Wall Street Journal. The New York Times first reported that Paramount will extend the go-shop window. A rep for Bronfman declined to comment; a spokesman for the special committee did not respond to a request for comment.
The Bronfman-led bid, first submitted Monday to Paramount’s board , came in just two days before the Aug. 21 midnight ET deadline for the go-shop period allowed under the company’s agreement with Skydance that lets Paramount consider superior takeover proposals. With Bronfman’s hat officially in the ring, the board’s special committee has extended the go-shop period for another 15 days, until Sept.
5, 2024. What happens next? The Paramount board’s committee, after a review, may determine Bronfman’s $6 billion proposal is a no-go and that Paramount will proceed with the original Skydance deal. Alternatively, the Paramount board committee could deem the Bronfman bid a better offer, whereupon Skydance (with financial backer RedBird Capital Partners) would have the opportunity to sweeten its original terms.
In any case, Shari Redstone will have the final say-so over which path to pick. It’s unknown what Bronfman and his partners would do with Paramount Global if they were to complete an acquisition of NAI. They may break up the company in some way by selling off its divisions, which include CBS, Paramount Pictures, Showtime/MTV Entertainment Studios and Paramount Media Networks.
Bronfman, in an Aug. 19 letter to Charles Phillips — the Paramount board member and former Oracle exec who heads the special committee on M&A — said his proposal “eliminates the risks, uncertainties and costs of combining Paramount with Skydance,” and that Paramount’s business is “far more valuable” than the Skydance’s bid values it at. Skydance says the Paramount deal has an enterprise value of $28 billion, with Skydance itself valued at $4.
75 billion. Bronfman, formerly CEO of Warner Music Group and Seagram, reportedly secured $5.5 billion in capital commitments from nearly 20 backers.
Those include Fortress Investment Group, film producer Steven Paul, ex-Turner CEO John Martin, crypto investor and ex-child actor Brock Pierce — and media veteran Jon Miller, a partner at Shari Redstone’s Advancit Capital investment firm, according to the Wall Street Journal. Bronfman’s original $4.3 billion offer comprised $2.
4 billion for NAI (about $1.75 billion net of debt); an investment of $1.5 billion earmarked for Paramount’s balance sheet to pay down debt; and $400 million for the breakup fee Paramount would be forced to pay to the Skydance group if Paramount opts for Bronfman’s offer.
The Skydance-RedBird offer is worth more than $8 billion. That includes $2.4 billion for NAI’s shares, which represent 77% of the voting power in the company and $1.
5 billion to help pay down debt; in addition, they would pay common shareholders about $15 per share for a portion of their shares..
