Edgar Bronfman Jr.
Cameron Costa | CNBC
Edgar Bronfman Jr.'s bid for controlling stake in Paramount Global Shari Redstone may stay close to the company, if his bid is successful.
According to a person familiar with the matter, Bronfman is open to having Redstone, who currently serves as Paramount's non-executive chairman, remain involved in the company if Paramount's special committee accepts his consortium's offer to buy National Amusements, the controlling shareholder.
Bronfman has raised $6 billion to compete with Skydance Media for ownership of National Amusements, the holding company founded by Sumner Redstone, according to people familiar with the matter. Bronfman’s bid and Skydance’s would also include money to buy out a percentage of Paramount Global’s common shareholders.
At $6 billion, Bronfman’s offer would give about 20% of Class B stockholders cash at $16 a share. Skydance would pay about 50% of Paramount’s existing common stockholders at $15 a share as part of its offer, according to people familiar with the matter.
It’s not yet clear whether Redstone favors one offer over the other. Paramount Global’s special committee will decide whether Bronfman’s offer is better for shareholders by Aug. 28. If the committee decides Bronfman’s offer is better, Skydance will have four business days to make a similar offer. The deadline to complete the entire process is Sept. 5.
Bronfman still has a few more days to raise more money to mount a competing bid to take on Skydance, which agreed to an $8 billion merger with Paramount Global last month. Earlier this week, the special committee extended the so-called “shopping” period — during which it can accept competing offers — by 15 days to review Bronfman’s initial offer.
One person involved in Bronfman’s bid is former AOL CEO John Miller, suggesting that Redstone could have more control over the future Paramount Global than he would have with Skydance. Miller, a close Redstone ally, has been tying Bronfman to potential equity and would likely take a role in the company if it comes under Bronfman’s control — possibly a board seat and an operating role — 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, together run Advancit Capital, a small venture capital firm that invests in media and technology. The trio are the only three people who appear on the firm’s website. Miller has also served as a de facto strategic adviser to Redstone for many 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 Redstones and Bronfmans have circulated in similar circles, including donating heavily to Jewish institutions, Edgar Bronfman Jr. and Shari Redstone have not met often and have no previous close relationship, two of the people said.
Skydance CEO David Ellison and Redstone have had several discussions about the possibility of Redstone remaining a shareholder in the Skydance-Paramount Global joint venture, according to people familiar with the matter.
Redstone is taking a wait-and-see approach to any future involvement she might want to make in Paramount Global regardless of her ownership, according to a person familiar with her thinking.
Spokespeople for Redstone, Bronfman, the special committee at Paramount Global and Skydance declined to comment.
last minute offer
Bronfman has spent the past few weeks assembling individuals interested in owning a piece of Paramount Global, including film producer Steven Paul and Patron co-founder John Paul DeJoria, who had previously considered making their own bid, according to a person familiar with the process, as well as Fortress Investment Group and former Turner Broadcasting CEO John Martin.
Bronfman’s funding comes from many different sources, which could raise regulatory concerns if a significant amount of the money is from foreign entities. Having so many different funders could also make Bronfman’s bid riskier than Skydance’s, which is backed by private equity firm Red Bird Capital and billionaire Larry Ellison, David Ellison’s father.
Bronfman is Chairman of the Board. Fubo, Sports streaming service, former chairman of Universal and Warner Music.
The Wall Street Journal reported Thursday that Skydance’s lawyers sent a letter to Paramount Global’s special committee demanding that the company stop negotiating with Bronfman. Skydance said Paramount Global violated the terms of the store agreement by failing to notify Skydance that it planned to extend the period.
Skydance also claimed that the special committee was not entitled to extend the offer period because the offer should have been “reasonably expected to result in a better offer.” Skydance claimed that Bronfman's offer did not meet the criteria.
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