Edgar Bronfman, Jr.
Cameron Costa | CNBC
The future of Paramount Global It is still uncertain.
Paramount's special committee said Wednesday it will extend the agreed-upon “shopping visit” period of its merger agreement with Skydance by 15 days while it reviews a competing offer from Edgar Bronfman Jr.
Bronfman initially offered $4.3 billion late Monday for Shari Redstone’s National Amusements, Paramount’s majority shareholder, according to a person familiar with the offer. As part of the offer, Bronfman would acquire a minority stake in Paramount. But after submitting the offer, Bronfman raised more funds to back a higher bid, said the person, who asked not to be named to discuss the details of the offer.
On Wednesday, Bronfman raised the offer and submitted a revised bid of $6 billion, the source said.
The offer appears to replace Paramount's merger agreement with Skydance Media, which was signed in early July and ended a months-long negotiation process. The agreement included a 45-day “shopping period” during which Paramount could solicit other offers.
A representative for Bronfman declined to comment.
The special committee on Wednesday confirmed “the receipt of an acquisition proposal from Edgar Bronfman, Jr., on behalf of a consortium of investors.”
“As a result, the 'go buy' period is extended for the Bronfman Consortium until September 5, 2024, pursuant to the transaction agreement to which the Company remains bound,” the committee said in a statement. “There can be no assurance that this process will result in a Superior Proposal. The Company does not intend to disclose any further developments unless and until it determines that such disclosure is appropriate or otherwise required.”
The committee added that during the initial “sought-bid” period, it had contacted more than 50 third parties to assess potential takeover interest. The bid-sought period will expire before midnight on Wednesday for all other interested parties, the committee said.
The Skydance buying 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. 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 Class A shareholders would receive $23 each in cash or stock, and Class B shareholders would receive $15 per share, amounting to $4.5 billion in cash consideration available to public shareholders. Skydance also agreed to inject $1.5 billion of equity 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 transaction is completed, it would own all of Paramount's Class A shares and 69% of its Class B shares outstanding.
Bronfman’s initial offer called for National Amusements to be bought in an equity deal valued at $1.75 billion. That offer included a $1.5 billion investment into Paramount’s balance sheet, as was the case with the Skydance deal, and also included covering the $400 million termination fee that Paramount would owe Skydance if it backed out of the deal, according to the person familiar with the matter.
The improved offer made on Wednesday now includes $1.7 billion for a takeover bid that would give Paramount shareholders other than Redstone and non-voting shareholders the option to receive $16 per share, the person added.
Bronfman previously appeared Warner Music and the Seagram's liquor company and also served as CEO of Fubo Television since 2020. Details of its offer were first reported by The Wall Street Journal.
The Paramount-Skydance merger deal has drawn scrutiny from shareholders. Hedge fund manager Mario Gabelli has reportedly filed a lawsuit asking Paramount to turn over its books related to the Skydance deal, a possible first step toward 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.
