Bronfman Raises Bid for Paramount Control to $6 Billion

Former Seagram and Warner Music executive Edgar Bronfman Jr. has increased his bid to $6 billion in his last-minute attempt to acquire Paramount Global. This move aims to outpace David Ellison’s already accepted $8.4 billion offer for the Redstone family’s investment vehicle, National Amusements Inc., and Paramount.

This rapid series of events occurred as Paramount’s independent board members were considering whether to entertain Bronfman’s revised proposal for the company, which includes CBS, Comedy Central, Nickelodeon, Showtime, and the iconic Hollywood movie studio, Paramount.

Ellison’s Skydance Media had initially sealed an $8.4 billion deal in early July, with endorsement from Paramount’s board and its primary stakeholder, Shari Redstone. As part of the agreement, a 45-day “go-shop” period was given to allow other potential bidders to present more appealing offers.

Bronfman’s original $4.3 billion offer arrived on the 43rd day of this “go-shop” period. Now, the board’s Special Committee must decide whether they should extend the deadline into early September to scrutinize Bronfman’s proposal and its financial viability. They need to determine if Bronfman’s bid justifies shifting away from the Skydance deal.

Several sources familiar with the process revealed that Bronfman, the 69-year-old heir to the Seagram liquor empire, faces a difficult task in surpassing Ellison. Ellison, the son of billionaire Larry Ellison, has leveraged part of his family fortune to support Skydance’s bid. His proposal, which includes the backing of RedBird Capital Partners and a commitment to purchase shares from Paramount investors, seems more robust financially.

Ellison’s offer also features $4.5 billion dedicated to buying shares from Paramount’s non-voting Class B shareholders at $15 per share, gaining an edge with the Paramount board. In contrast, Bronfman’s latest proposal suggests setting up a fund to buy out some Class B shareholders for $16 per share, a step aimed at addressing the board’s fiduciary duties to all shareholders, not just those with voting rights like the Redstone family.

Certain shareholders have expressed concerns about Ellison’s phased acquisition and his intentions to integrate his Santa Monica-based studio, Skydance, into Paramount. Skydance is valued at $4.75 billion in the deal and co-owns some of Paramount’s largest franchises, including “Top Gun: Maverick,” “Transformers,” “Mission: Impossible,” “Reacher,” and “Star Trek.”

Both Skydance and Bronfman’s proposals involve buying out the Redstones’ stake in NAI for $2.4 billion, leaving the family with about $1.75 billion after debt repayment.

Bronfman has long been a significant player in Hollywood. He previously led Universal Studios and Warner Music and currently serves as executive chairman of FuboTV. Recently, he achieved a legal victory over Disney, Warner Bros. Discovery, and Fox Corp., as a federal judge temporarily halted their plans for a new sports streaming service due to anti-trust concerns.

Earlier this year, Bronfman struggled to secure financing for his bid, initially attempting to partner with Bain Capital, which ultimately declined to participate. This setback allowed Skydance to advance its offer.

Bronfman then assembled a diverse group of individual investors, including former Fox and AOL executive Jon Miller, Atlas Comics investor Steven Paul, former “Mighty Ducks” actor Brock Pierce, and John Martin, the former CFO of Time Warner. Together, they rushed to finalize a proposal by this week’s deadline.

Although Shari Redstone reportedly favors a merger with Skydance, given the Ellison family’s wealth and their intent to keep the company intact, her cordial relationship with Bronfman is noteworthy. Both Bronfman and Redstone are members of prominent dynasties and share similar circles in New York’s media industry. Additionally, Miller—an essential part of Bronfman’s group—is a former partner in Redstone’s investment firm, Advancit Capital.

Whether or not Bronfman’s bid succeeds, the effort may still prove beneficial in demonstrating the transparency and competitiveness of the sales process, potentially helping Paramount defend against shareholder lawsuits.

Paramount shares rose by 1.4%, closing at $11.09.

Source: Los Angeles Times