Bronfman Makes Formal Bid for Paramount: What’s Next?
Bronfman Makes Formal Bid for Paramount: What’s Next?
The new attempt to buy Paramount has been submitted just hours before the deadline.
In a move worthy of a corporate thriller, Edgar Bronfman Jr. is swooping in at the last minute with a new bid to take over Paramount Global. Bronfman has formally submitted his bid to buy the company, just hours before the 45-day “go-shop” window agreed to in Paramount’s existing deal with Skydance Media expires on Aug. 21. The bid came in on Monday evening, and now heads to Paramount’s special committee that has been convened to evaluate merger and acquisition offers.
Key Details:
- Bronfman’s bid equals $4.3 billion in total and makes the pitch to shareholders that their stakes will be less diluted than in the Skydance deal.
- Skydance has the right to improve its offer to exceed Bronfman’s deal terms.
- Bronfman has been considering whether or not to make a play for Paramount since June.
The offer submitted by Bronfman includes $1.75 billion to buy National Amusements Inc., the holding company Shari Redstone uses to control the nearly 80% of Paramount’s voting stock that she owns. That’s equal to the amount Skydance CEO David Ellison has offered; Bronfman has also pledged a $1.5 billion infusion to Paramount’s balance sheet, to help it pay down debt.
Also included in Bronfman’s bid is the money to pay a $400 million breakup fee if his bid is accepted over Skydance’s. All in all, the Bronfman offer is worth $4.3 billion, including debt. The Wall Street Journal was first to report the submission of the bid, and the terms of the deal Bronfman is trying to make.
Now that the Bronfman offer has been submitted to Paramount’s special committee, its members must decide if it “is or would reasonably be expected to lead to a superior proposal” than would Skydance’s bid. If they find it to be superior, then the go-shop window would be extended by two weeks to allow Skydance to potentially make a better offer. Many nonvoting shareholders have expressed concern that the Skydance deal enriches Redstone and leaves them behind; in fact, one has sued to try to stop the deal from happening.
The selling point to those shareholders in Bronfman’s offer is that their investments won’t be diluted nearly as much as they would be if Skydance were to merge with Paramount.
Bronfman’s interest in Paramount dates back to June and the former Warner Media executive and CEO of the Seagram company didn't give up when Paramount accepted the Skydance offer and entered the 45-day go-shop window. Late last week, reports emerged that Bronfman had put together the financing necessary for a bid of his own; the WSJ says that his backers include “high net-worth individuals and family offices.”
What Will Paramount’s Future Be if Bronfman Bid is Accepted?
There aren’t many details available as of yet as to what Bronfman would do with Paramount if he won this bidding war. One thing is certain, however; Bronfman would not merge Paramount with Skydance, as Ellison intends to do if he ultimately wins out.
Bronfman has discussed bringing in strategic partnerships with tech allies and others, according to the Journal. One potential partnership is with the live TV streaming service Fubo; Bronfman is Fubo’s executive chairman, and a bundle option of Fubo and Paramount+ seems highly likely if he were to ultimately buy Paramount Global.
Since the first whispers that Warner Bros. Discovery was at least interested in acquiring Paramount back in December 2023, the saga of the company’s M&A talks have dominated headlines and kept industry analysts on their toes. The Skydance deal was set to cross the finish line, but Bronfman’s bid submission has put Ellison’s victory celebration on ice for the time being.
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