Paramount Global’s Future Uncertain as Edgar Bronfman Jr. Submits Revised $6 Billion Bid

The future of Paramount Global, the media conglomerate, is currently uncertain as the company’s special committee has extended the “go shop” period of its merger agreement with Skydance. The extension comes as the committee reviews a competing offer from Edgar Bronfman Jr., who initially offered $4.3 billion to acquire a minority stake in Paramount. However, Bronfman raised additional funds to support a higher bid, resulting in a revised offer of $6 billion.

Bronfman’s offer aims to supersede Paramount’s existing merger agreement with Skydance Media, which was announced in July after a lengthy negotiation process. The agreement included a 45-day “go shop” period during which Paramount could seek other offers. The special committee has confirmed the receipt of Bronfman’s acquisition proposal on behalf of a consortium of investors. The “go shop” period for the Bronfman Consortium has been extended until September 5, 2024.

During the initial “go shop” period, the committee reached out to over 50 third parties to gauge potential acquisition interest. However, the committee stated that there is no assurance that this process will result in a Superior Proposal. The committee will only disclose further developments if it deems such disclosure appropriate or necessary.

Meanwhile, the Skydance buying consortium, which includes private equity firms RedBird Capital Partners and KKR, has agreed to invest over $8 billion into Paramount and acquire National Amusements, the controlling shareholder. The deal would give National Amusements an enterprise value of $2.4 billion, with $1.75 billion in equity. Class A shareholders of Paramount would receive $23 per share in cash or stock, while class B shareholders would receive $15 per share, totaling $4.5 billion for public shareholders. Skydance has also committed to injecting $1.5 billion of capital into Paramount’s balance sheet.

Bronfman’s initial bid proposed acquiring National Amusements in an equity deal valued at $1.75 billion. The offer included a $1.5 billion investment into Paramount’s balance sheet, similar to the Skydance deal, and covered the $400 million breakup fee that Paramount would owe Skydance if the deal fell through. The revised bid on Wednesday includes $1.7 billion for a tender offer that would allow non-Redstone, nonvoting Paramount shareholders to receive $16 per share.

Bronfman, who previously led Warner Music and Seagram, has been the executive chairman of Fubo TV since 2020. His bid for Paramount was first reported by The Wall Street Journal. However, the merger agreement between Paramount and Skydance has faced scrutiny from shareholders. Money manager Mario Gabelli has reportedly filed a lawsuit seeking access to Paramount’s books related to the Skydance deal, potentially leading to a legal challenge. Investor Scott Baker has also sued to block the deal, arguing that it would negatively impact shareholders by $1.65 billion.

Overall, the future of Paramount Global remains uncertain as the company evaluates competing offers and faces legal challenges. The outcome of the ongoing negotiations will determine the direction the media conglomerate takes and the potential impact on its shareholders.