Skydance Accuses Paramount of Deal Violation Over Edgar Bronfman Jr. Talks: Report

In the latest twist in the Paramount Global M&A saga, Skydance Media is alleging the media company breached the terms of their merger agreement by engaging with a rival $6 billion bid from investors led by billionaire Edgar Bronfman Jr.

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Lawyers for David Ellison’s Skydance sent a letter Thursday to the special committee established by Paramount to evaluate M&A offers, accusing the committee of breaking the terms of their deal by extending the negotiating window to consider Bronfman’s proffer — and threatening to withdraw its own $8 billion-plus offer, the Wall Street Journal reported.

“Paramount has committed an incurable, material breach of the Transaction Agreement,” Skydance’s letter to the Paramount special committee said, according to the report. Per the Journal, the letter also said, “While Skydance is not currently exercising its right to terminate the Transaction Agreement, we reserve the right to do so in the future.”

Reached by Variety, reps for Skydance and the Paramount board’s special committee declined to comment. A spokesperson for Bronfman did not respond to a request for comment.

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On Wednesday, the Bronfman-led investor group submitted a $6 billion bid — raised from its initial $4.3 billion offer — to acquire National Amusements Inc. and acquire a minority share of Paramount Global’s stock from nonvoting shareholders. In response, the Paramount board’s special committee extended the go-shop period for considering credible bids that rival Skydance’s offer by 15 days, until Sept. 5.

After months of on-again-off-again talks, Skydance and financial partner RedBird Capital Partners on July 7 announced a binding agreement that would see Skydance buy the shares of NAI (which owns 77% of the voting power in Paramount Global) and then merge with Paramount. Under the terms of the deal, Paramount would pay a $400 million breakup fee to Skydance-RedBird if the media company opts for a “superior” offer.

(Pictured above: Skydance Media CEO David Ellison)

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Source: Variety, Wall Street Journal