Edgar Bronfman Jr. Withdraws from Paramount Bidding Process

Edgar Bronfman Jr. has withdrawn from the bidding process for Paramount, concluding an extensive effort to gain control of the media giant.

“Tonight, our bidding group informed the special committee that we will be exiting the go-shop process. It was a privilege to have the opportunity to participate,” the former Warner Music Group CEO said in a statement on Monday.

He added, “We continue to believe that Paramount Global is an extraordinary company, with an unrivaled collection of marquee brands, assets, and people. While there may have been differences, we believe that everyone involved in the sale process is united in the belief that Paramount’s best days are ahead. We congratulate the Skydance team and thank the special committee and the Redstone family for their engagement during the go-shop process.”

A representative for Paramount’s independent special committee did not immediately respond to TheWrap’s request for comment.

As part of Paramount’s $8 billion merger agreement with Skydance Media, the committee had the ability to evaluate competing offers during a 45-day window that was set to expire on Aug. 21 at 11:59 p.m. ET.

During this window, the committee reached out to more than 50 third parties to gauge their interest in making a proposal to acquire Paramount.

Bronfman initially submitted a $4.3 billion bid, which he later revised to $6 billion. The offer included $2.4 billion to acquire controlling shareholder Shari Redstone’s National Amusements, $1.5 billion to pay down Paramount’s $14.6 billion in debt, and a $1.7 billion tender offer that would allow Paramount’s non-voting shareholders to cash out at a premium of $16 per share. The remaining funds were intended to cover the $400 million break-up fee to Skydance.

As a result, the committee opted to extend the window for Bronfman until Sept. 5, while the Aug. 21 deadline applied to other parties.

“There can be no assurance this process will result in a Superior Proposal,” the special committee stated at the time. “The Company does not intend to disclose further developments unless and until it determines such disclosure is appropriate or is otherwise required.”

Despite facing criticism from shareholders that the Skydance deal would benefit Redstone over the rest of the company’s investor base, Bronfman Jr. encountered significant challenges against the Ellison family’s financial backing.

Under the terms of the deal with Skydance, which was expected to close in the third quarter of 2025, the new Paramount will have an enterprise value of $28 billion, with Skydance being valued at $4.75 billion. Class A shareholders can opt to receive $23 cash per share or 1.5333 shares of Class B stock of the new Paramount.

Class B shareholders have the option to receive $15 per share or one share of Class B stock of the new Paramount, subject to proration if those elections exceed $4.3 billion in aggregate. If shares are elected over cash, reducing the cash required to under $4.3 billion, the $1.5 billion allocated to Paramount’s balance sheet could increase up to a cap of $3 billion.

David Ellison’s bid is significantly backed by his father, Oracle cofounder Larry Ellison, who is the fifth-richest man in the world with a net worth of $172.1 billion as of Monday, investing $6 billion into his son’s bid for Paramount. The remaining funds are supported by RedBird Capital Partners.

In contrast, Bronfman was offering Class A shareholders $24.53 per share in cash, a 7% premium compared to the $23 per share offered by Ellison, or they could exchange their shares for 1.5333 Class B shares. He also aimed to dismantle Paramount’s current dual-share structure, transferring voting power to Class B investors, who currently have none.

Additionally, Bronfman pledged to double Paramount’s adjusted earnings in the first year through a combination of $3 billion in permanent cost savings and the use of technologies to enhance Paramount’s capabilities, compared to $2 billion in cuts proposed by Skydance.

Paramount reported a market cap of $8.08 billion and a stock price of $11.33 per share at the close of Monday’s trading session. Its stock has seen a decline of 73% over the past five years, 23% in the past year, and 21% year-to-date. However, the stock is up 2% in the past six months and 1.25% in the past month.

Source: TheWrap, ThePost