Bronfman Drops Paramount Bid, Paves Way for Skydance Merger
Bronfman Drops Paramount Bid, Paves Way for Skydance Merger
Bronfman’s last-minute bid faced mounting questions about required financing, and he had little time to answer those questions.
Skydance Media officials are breathing a sigh of relief this morning. That studio is once again the only suitor standing in the race to acquire Paramount Global. The two sides struck a deal in July for a complex, two-step merger agreement that included a 45-day “go-shop” provision, which allowed Paramount to see if it could find better deal terms elsewhere. At the last minute, Seagram liquor heir and former Warner Music chair Edgar Bronfman Jr. stepped in with a bid worth as much as $6 billion. However, according to the New York Times, Bronfman abandoned his efforts Monday evening, informing the special committee set up by Paramount to explore merger and acquisition opportunities that he was pulling his proposal off the table.
Key Details:
- Paramount’s mounting questions about Bronfman’s financing left him scrambling for answers in a short time frame.
- Skydance warned Paramount to stop negotiating with Bronfman soon after his bid became official.
- With the go-shop window closed, the Skydance deal is expected to close in the first half of 2025.
The 45-day window in which Paramount was allowed to seek better deal terms under the Skydance agreement went by fairly quietly until Aug. 20, the day before it was set to expire. That’s when Bronfman swooped in with a $4.3 billion bid, which he quickly upped to $6 billion to better compete with the $8 billion value of Skydance’s offer.
Paramount officially extended the go-shop period, and said that it would declare which offer it found to be superior on Aug. 28. But as that date got closer and closer, more questions arose about the financing Bronfman had secured in order to make his bid. The Times reports that Bronfman could not provide Paramount with enough details to satisfy concerns that his backers had enough capital to carry the deal through.
It didn’t help Bronfman that he had relatively little time to pull together the information Paramount wanted. The Aug. 28 deadline set by Paramount was a product of the extension of the go-shop window, which lasted until Sept. 5. The days between Aug. 28 and Sept. 5 were set aside to allow Skydance to potentially improve its deal terms to best Bronfman, in case Paramount settled on the latter’s bid as its preferred offer.
All of those factors led to Bronfman officially rescinding his proposal on Monday evening.
“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,” Bronfman said in a statement. “We congratulate the Skydance team and thank the special committee and the Redstone family for their engagement during the go-shop process.”
“We thank Mr. Bronfman and his investor group for their interest and efforts,” said Charles Phillips Jr., chairman of Paramount’s special committee.
Will Skydance Pull its Offer, Too?
Skydance was not happy with Paramount’s decision to extend the go-shop window to consider Bronfman’s offer. The company sent a letter to Paramount after news of the Bronfman pursuit broke, rife with phrases like “incurable, material breach of the Transaction Agreement.” It warned Paramount to stop negotiating with Bronfman at once, or it would consider pulling out of the deal.
Paramount kept talking with Bronfman anyway, even though it quickly became obvious that the serious questions regarding his financing would not be easy to answer. Since Paramount has now closed the go-shop window, Skydance is the only firm with a deal offer on the table, and their two-step merger can go forward as long as Skydance remains interested in pursuing the transaction.
I don’t think Skydance will remove its offer out of spite, considering how long and hard the negotiations have been to get a deal made. But there’s clearly no love lost on Skydance CEO David Ellison’s part, and Paramount will likely have some corporate groveling to do in the next few weeks to make nice.
Analysts expect the Skydance merger to close by the first half of 2025. The deal could get a look from regulators since it involves a major broadcast network (CBS) changing hands, but since Skydance does not own any broadcast TV assets already, there aren’t expected to be any major hang-ups.
Paramount Plus
Paramount+ is a subscription video streaming service that includes on-demand access to 40,000+ TV show episodes from BET, CBS, Comedy Central, MTV, Nickelodeon, Nick Jr. and more. Get free access with a Walmart+ subscription.
Paramount+ includes “1883,” “Tulsa King,” “Star Trek: Discovery,” “SpongeBob SquarePants,” and “PAW Patrol.” Subscribers can watch the NFL, college football, The Masters, college basketball, UEFA Champions League, UEFA Europa, Serie A, and NWSL. The service also offers the option to watch your live CBS affiliate. The upgraded ad-free package includes premium movies and shows from Showtime.