Edgar Bronfman Jr.
Cameron Costa | CNBC
future Paramount Global Still not confirmed.
Paramount's special committee said Wednesday it will extend the “fast-shop” period agreed to in its merger agreement with Skydance by 15 days while it reviews a competing bid from Edgar Bronfman Jr.
Bronfman initially offered $4.3 billion late Monday to buy National Amusements, owned by Shari Redstone, Paramount’s controlling shareholder, a person familiar with the offer said. As part of the offer, Bronfman would take a minority stake in Paramount. However, after making the offer, Bronfman raised more money to support a higher bid, said the person, who asked not to be identified discussing details of the offer.
On Wednesday, Bronfman upped his offer and made a revised $6 billion bid, the source said.
The offer appears to replace the merger agreement Paramount struck with Skydance Media in early July, the culmination of months of negotiations. The deal included a 45-day “shopping” period during which Paramount could seek other offers.
Bronfman's representative declined to comment.
The special committee confirmed on Wednesday that it had “received a takeover offer from Edgar Bronfman Jr., on behalf of a consortium of investors.”
“As a result, the Bronfman Group’s ‘go-to-store’ period has been extended through September 5, 2024, in accordance with the transaction agreement to which the company remains subject,” the commission said in a statement. “There can be no assurance that this process will result in a better offer. The company does not intend to disclose further developments unless it determines that such disclosure is appropriate or otherwise required.”
The commission added that it contacted more than 50 third parties during the “pre-shopping” period to gauge potential interest in the acquisition. The commission said the pre-shopping period will end before midnight on Wednesday for all other parties.
The Skydance consortium, which also includes private equity firms Red Bird 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 will receive $23 in cash or stock, and Class B shareholders will receive $15 per share, for a total cash consideration of $4.5 billion available to general shareholders. Skydance has also agreed to inject $1.5 billion of equity 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 deal goes through, it will own all of Paramount's Class A shares and 69% of its Class B shares outstanding.
Bronfman’s initial offer was to buy National Amusements in a $1.75 billion stock deal. That offer included a $1.5 billion investment on Paramount’s balance sheet, like the Skydance deal, and included covering the $400 million breakup fee Paramount would owe Skydance if it walked away from the deal, according to the person familiar with the matter.
The local offer made Wednesday now includes a $1.7 billion takeover bid that would give non-voting Paramount shareholders who are not affiliated with Redstone an option to receive $16 a share, the person added.
Bronfman previously ran Warner Music Seagram's Liquor Company and also served as CEO of FUBO TV Since 2020. Details of his candidacy were first reported by The Wall Street Journal.
The Paramount-Skydance merger agreement has drawn scrutiny from shareholders. Money manager Mario Gabelli has reportedly filed a lawsuit demanding that Paramount turn over its books related to the Skydance deal — a potential first step toward a lawsuit challenging the deal. Investor Scott Baker has reportedly filed a lawsuit to block the deal, arguing that it would cost shareholders $1.65 billion.
