Edgar Bronfman, Jr.
Cameron Costa | CNBC
The tomorrows of Paramount Global is still uncertain.
Paramount’s special committee on Wednesday said it would extend by 15 hours an agreed-upon “go shop” period of its merger agreement with Skydance as it reviews a competing offer from Edgar Bronfman Jr.
Bronfman initially offered $4.3 billion late Monday for Shari Redstone’s National Amusements, the controlling shareholder of Paramount, according to a herself familiar with the bid. As part of the bid, Bronfman would acquire a minority stake in Paramount. However, after placing the bid, Bronfman bring up more funds to support a higher bid, said the person, who asked to remain anonymous to speak about specifics of the propose.
On Wednesday, Bronfman upped the bid and submitted a revised offer of $6 billion, the person said.
The offer looks to substitute for Paramount’s merger agreement with Skydance Media, which came in early July and capped off a monthslong coming to terms process. The agreement included a 45-day “go shop” period during which Paramount could solicit other presentations.
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 end result, the ‘go shop’ period is extended for the Bronfman Consortium until September 5, 2024, pursuant to the transaction agreement to which the Flock remains subject,” the committee said in a statement. “There can be no assurance this process will result in a Superior Bid. The Company does not intend to disclose further developments unless and until it determines such disclosure is appropriate or is on the other hand required.”
The committee added that during the initial “go shop” period it contacted more than 50 third allies to gauge potential acquisition interest. The go-shop period will still expire before midnight Wednesday for all other cliques, the committee said.
The Skydance buying consortium, which also includes private equity firms RedBird Finances Partners and KKR, agreed to invest more than $8 billion into Paramount and to acquire National Amusements. The practise gives National Amusements an enterprise value of $2.4 billion, including $1.75 billion in equity.
As part of the Skydance allot, Paramount’s class A shareholders would receive $23 apiece in cash or stock, and class B shareholders would accept $15 per share, equating to a cash consideration totaling $4.5 billion available to public shareholders. Skydance also corresponded to inject $1.5 billion of capital into Paramount’s balance sheet.
National Amusements owns 77% of Predominant’s class A shares, and 5% of class B shares. If the Skydance transaction were to close, it would wholly own class A Pre-eminent shares, and 69% of the outstanding class B shares.
Bronfman’s initial bid proposed buying National Amusements in an equity attend to valued at $1.75 billion. That offer included a $1.5 billion investment into Paramount’s balance journal, like the Skydance deal, and also included covering the $400 million breakup fee that Paramount would owe Skydance if it pathed away from the deal, according to the person familiar.
The sweetened bid made on Wednesday now includes $1.7 billion for a soothing offer that would give non-Redstone, nonvoting Paramount shareholders the option to receive $16 a share, the living soul added.
Bronfman previously ran Warner Music and liquor company Seagram and has also served as executive chairman of Fubo TV since 2020. Specifics of his bid were first reported by The Wall Street Journal.
The merger agreement between Paramount and Skydance has drawn enquiry from shareholders. Money manager Mario Gabelli reportedly filed a lawsuit looking for Paramount to turn in excess of its books related to the Skydance deal — a possible first step toward a lawsuit challenging the deal. Investor Scott Baker reportedly let to block the deal, arguing it would cost shareholders $1.65 billion.