Another Potential Paramount Buyer Considering Bid as ‘Go Shop’ Window with Skydance Continues
Edgar Bronfman Jr. was eyeing an offer for Paramount before the Skydance deal was approved, and is reportedly still mulling.
Just when you thought it was safe to assume that the Paramount merger deal was all sewn up, a new wrinkle in the story emerges. The latest wrinkle comes in the form of a report from Axios, which states that former Warner Music chair Edgar Bronfman Jr. hasn’t completely given up on the idea of bidding for Paramount, even as the company proceeds with a 45-day “go-shop” period stipulated in its merger deal with Skydance Media.
Key Details:
- Bronfman emerged as a potential suitor for Paramount months ago, but never submitted a formal bid.
- The “go-shop” window in the Paramount and Skydance deal ends on Aug. 21.
- A spokesperson said Bronfman is “considering his options” with regard to Paramount.
Bronfman first entered the Paramount picture in June, when it was reported he had preliminary interest in a deal. That was just after Paramount’s merger talks with Skydance had seemingly died for good, but unbeknownst to many, the two sides continued discussing a deal of their own once the pressure cooled off a bit.
The Paramount board approved the two-step merger deal with Skydance in early July. The merger and acquisition agreement is reportedly worth around $8 billion and will see Skydance buy out National Amusements Inc., the holding company that controls almost 80% of Paramount’s voting stock. It will then merge Paramount and Skydance into a single company, but one of the provisions in the deal allows Paramount to shop the agreement for 45 days to see if any other parties can beat it.
That provision is intended to help indemnify current Paramount controlling shareholder Shari Redstone against potential lawsuits brought by investors who say that they’re not getting enough from the Skydance deal. One Class-B shareholder has already sued on those grounds, and money manager Mario Gabelli has also taken legal action to get more information about Paramount’s finances to evaluate if further steps are necessary to protect clients with Paramount stock.
Will Bronfman Get Serious About a Bid?
If Bronfman really wants to get in on Paramount Global, he doesn’t have much time left. The “go-shop” period ends on Aug. 21, so Bronfman has around three weeks to line up the financing and finish due diligence on Paramount before he moves ahead on a bid.
A spokesperson for Bronfman said that he’s “still considering his options,” according to Axios. He’s backed by the private equity giant Bain Capital, and previous reports suggest he was prepared to offer between $2 billion and $2.5 billion for NAI. At this point, there’s no way to be sure if Bronfman would commit to investing billions in Paramount itself, as Skydance and its CEO David Ellison have done.
Should Bronfman actually follow through on this whim and make a successful attempt to steal Paramount out from under Skydance, Paramount will have to pay a $400 million break-up fee. But most observers consider that unlikely; “go-shop” windows like the one built into the Paramount and Skydance merger are not uncommon, and it’s very rare that a company finds a buyer waiting to exceed the bid it has in hand on the open market.
When asked about the potential for a Bronfman bid, Paramount told Axios that it “does not intend to disclose developments with respect to the go-shop process unless and until it determines such disclosure is appropriate or is otherwise required.”
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