Edgar Bronfman Jr.
Cameron Costa | CNBC
The future Paramount Global It’s still uncertain.
Paramount’s special committee said Wednesday it was extending the “go-shop” period agreed to in its merger deal with Skydance by 15 days to consider a competing proposal from Edgar Bronfman Jr.
Bronfman initially made a $4.3 billion takeover offer late Monday to Paramount’s controlling shareholder, Shari Redstone’s National Amusements, according to a person familiar with the deal. As part of the offer, Bronfman was to take a minority stake in Paramount. But after making the offer, Bronfman raised more capital to back up the higher bid, said the person, who asked not to be identified discussing details of the offer.
Bronfman raised his bid on Wednesday, submitting a revised offer of $6 billion, according to people familiar with the matter.
The proposal would likely replace the merger agreement between Paramount and Skydance Media that was signed in early July, capping a months-long negotiation process. The agreement included a 45-day “go-shop” period during which Paramount could solicit other proposals.
A representative for Bronfman declined to comment.
The special committee confirmed on Wednesday that it had “received an acquisition proposal from Edgar Bronfman Jr. on behalf of a consortium of investors.”
“As a result, the Bronfman Consortium’s ‘go-shop’ period, subject to the transaction agreement to which the Company remains subject, will be extended until September 5, 2024,” the committee said in a statement. “There can be no assurance that this process will result in a superior proposal, and the Company does not intend to disclose any further developments unless it determines that disclosure is appropriate or necessary.”
The committee added that it had contacted more than 50 third parties during an initial “go-shop” period to gauge their interest in a takeover. For all other parties, the go-shop period is scheduled to end by midnight on Wednesday, the committee said.
The Skydance 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, a deal that values National Amusements at an enterprise value of $2.4 billion, with $1.75 billion of that coming from stock.
As part of the deal with Skydance, Paramount’s Class A shareholders will receive $23 per share in cash or stock, and Class B shareholders will receive $15 per share, for a total of $4.5 billion in cash available to 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 shares and 5% of its Class B shares. If the deal with Skydance goes through, the company will own 100% of Paramount’s Class A shares and 69% of its outstanding Class B shares.
Bronfman’s original proposal was to buy National Amusements in a $1.75 billion all-stock deal that also included a $1.5 billion investment in Paramount’s balance sheet, similar to the Skydance deal, and a $400 million break-up payment to Skydance if Paramount walked away from the deal, according to people familiar with the matter.
The increased proposal made Wednesday also includes a $1.7 billion tender offer that would give non-voting Paramount shareholders other than Redstone the option to receive $16 a share, the people said.
Bronfman previously Warner Music He was also the founder of the liquor company Seagram. Fubo TV Since 2020. Details of his bid were first reported by The Wall Street Journal.
The Paramount-Skydance merger agreement has come under scrutiny from shareholders. Asset manager Mario Gabelli has reportedly filed a lawsuit to force Paramount to disclose its books relating to the Skydance deal, which could be the first step in a lawsuit challenging the deal. Investor Scott Baker has reportedly filed a lawsuit to block the deal, arguing it would cost shareholders $1.65 billion.
