The fate of Global Paramount remains uncertain.
Last Wednesday, Paramount’s special committee announced a 15-day extension to the “go shop” period originally established in their merger plan with Skydance, due to a new offer from Edgar Bronfman Jr.
Bronfman initially made a $4.3 billion offer Monday to buy a minority stake in Paramount from Shari Redstone-controlled National Amusements. Sources familiar with the matter said that after making his initial offer, Bronfman secured additional financing to support a higher bid.
According to a well-placed source, Bronfman had improved his proposal to $6 billion on Wednesday.
This new proposal could potentially replace the existing terms of the merger between Paramount and Skydance Media, which were finalized in early July after lengthy negotiations. That original deal included a 45-day window that allowed Paramount to seek alternative proposals.
A spokesperson for Bronfman chose not to comment on the matter.
The committee acknowledged that it has received a new acquisition offer from Edgar Bronfman, Jr., representing a group of investors. “Accordingly, the ‘go shop’ period for the Bronfman Consortium has been extended through September 5, 2024, under the terms of the existing settlement agreement,” the committee said. They also noted that there is no guarantee that this investigation will result in an improved proposal and that additional details will be disclosed only if deemed necessary or mandatory.
Initially, during the “go shop” period, the committee contacted more than 50 potential bidders to gauge their interest in acquiring Paramount. This period will end at midnight Wednesday for all other parties except the Bronfman Group.
Skydance’s buying group, which includes private equity firms RedBird Capital Partners and KKR, plans to invest more than $8 billion in Paramount and acquire National Amusements, valuing it at $2.4 billion in enterprise value, including $1.75 billion in equity.
Under the Skydance deal, Paramount’s Class A shareholders will receive $23 per share in cash or stock, while Class B shareholders will receive $15 per share, for a total of $4.5 billion in cash for public shareholders. Additionally, Skydance has committed to a $1.5 billion equity injection for Paramount.
National Amusements owns a 77% stake in Paramount’s Class A shares and 5% of its Class B shares. If the deal closes, Skydance would receive all of the Class A shares and 69% of the Class B shares outstanding.
Bronfman’s original proposal called for an all-stock acquisition of National Amusements valued at $1.75 billion, including a $1.5 billion equity investment in Paramount, similar to Skydance’s proposal. It also covered a $400 million severance payment that Paramount would have owed Skydance if the deal fell through.
Wednesday’s updated offering now includes a $1.7 billion tender offer that allows non-voting, non-Redstone Paramount shareholders to sell their shares at $16 each.
Details of his proposal were first reported by The Wall Street Journal by Bronfman, the former chairman of Warner Music and Seagram and current executive chairman of Fubo TV since 2020.
This merger scenario has caught the attention of investors, with prominent asset manager Mario Gabelli filing a lawsuit seeking access to Paramount records related to the Skydance deal, which could lead to further legal challenges. Another investor, Scott Baker, has filed a lawsuit seeking to block the merger, citing a potential $1.65 billion loss to shareholders.
