Paramount Global‘s board has extended the go-shop window under its Skydance Media deal for 15 days as it engages with an investor group led by Edgar Bronfman Jr., which on Wednesday proffered a higher $6 billion bid to take control of the media conglomerate.
Bronfman and his backers on Wednesday made the higher bid to acquire National Amusements Inc., Paramount’s controlling shareholder, and in a deal sweetener will offer $1.7 billion to Paramount nonvoting shareholders a $16/share buyout premium for some of their stock, sources confirmed to Variety. They had originally offered $4.3 billion and did not offer to acquire any of Paramount Global’s nonvoting stock. The move puts on hold, for now, the deal from David Ellison’s Skydance Media that would see Skydance merge with Paramount.
The Bronfman-led bid, first submitted Monday to Paramount’s board, came in just two days before the Aug. 21 midnight ET deadline for the go-shop period allowed under the company’s agreement with Skydance that lets Paramount consider superior takeover proposals. With Bronfman’s hat officially in the ring, the board’s special committee has extended the go-shop period for another 15 days, until Sept. 5, 2024.
What happens next? The Paramount board’s committee, after a review, may determine Bronfman’s $6 billion proposal is a no-go and that Paramount will proceed with the original Skydance deal. Alternatively, the Paramount board committee could deem the Bronfman bid a better offer, whereupon Skydance (with financial backer RedBird Capital Partners) would have the opportunity to sweeten its original terms. In any case, Shari Redstone will have the final say-so over which path to pick.
It’s unknown what Bronfman and his partners would do with Paramount Global if they were to complete an acquisition of NAI. They may break up the company in some way by selling off its divisions, which include CBS, Paramount Pictures, Showtime/MTV Entertainment Studios and Paramount Media Networks.
Bronfman, in an Aug. 19 letter to Charles Phillips — the Paramount board member and former Oracle exec who heads the special committee on M&A — said his proposal “eliminates the risks, uncertainties and costs of combining Paramount with Skydance,” and that Paramount’s business is “far more valuable” than the Skydance’s bid values it at. Skydance says the Paramount deal has an enterprise value of $28 billion, with Skydance itself valued at $4.75 billion.
(Excerpt) Read more in: Variety