Edgar Bronfman Jr. has made an offer for a controlling stake in Paramount Global that could potentially keep Shari Redstone closely linked to the company. If his bid is successful, Bronfman is open to having Redstone, who currently holds the position of non-executive chairman at Paramount, continue to be involved with the company. This offer comes as Bronfman’s consortium challenges Skydance Media for ownership of National Amusements, the holding company founded by Sumner Redstone.
Bronfman has managed to raise an impressive $6 billion for his bid, which would include funds to buy out a percentage of Paramount Global common shareholders. His bid would provide cash to about 20% of Class B holders at $16 per share. On the other hand, Skydance’s bid would pay out approximately 50% of current Paramount common investors at $15 per share. It remains unclear if Redstone has a preference for one offer over the other, leaving the decision in the hands of the Paramount Global special committee.
The special committee is set to assess whether Bronfman’s offer is a superior proposal for shareholders by Aug. 28. Should they determine in favor of Bronfman, Skydance will have a short window of four business days to match the offer. The entire decision-making process is expected to be concluded by Sept. 5, giving Bronfman time to potentially raise more funds for a competing bid against Skydance’s $8 billion merger deal with Paramount Global.
One notable figure in Bronfman’s bid is former AOL CEO Jon Miller, a close ally of Redstone. Miller’s involvement suggests that Redstone might have more control over the future of Paramount Global under Bronfman’s leadership compared to Skydance. In the event that Bronfman’s deal is accepted, he would take on the role of CEO, further solidifying his position within the company.
Although the Redstone and Bronfman families have had some connections, Edgar Bronfman Jr. and Shari Redstone do not share a close preexisting relationship. On the other hand, Skydance CEO David Ellison has engaged in discussions with Redstone about her potential role as a shareholder in a combined Skydance-Paramount Global entity. Redstone, however, is taking a cautious approach to any future involvement, regardless of ownership, signaling her intention to weigh her options carefully.
It is worth noting that Bronfman’s financing for his bid comes from a variety of sources, which could potentially raise regulatory concerns if a significant portion of the funding is derived from foreign entities. This diversified funding model may also introduce additional risks to Bronfman’s offer when compared to Skydance’s bid, which boasts backing from private equity firm RedBird Capital and Larry Ellison.
Skydance has taken a firm stance against Bronfman’s bid, going as far as sending a letter to the Paramount Global special committee demanding an end to negotiations with Bronfman. They argue that the criteria for a superior proposal have not been met by Bronfman’s offer, questioning the validity of the extended go-shop period granted by the committee.
The battle for the controlling stake in Paramount Global underscores the complexities and challenges involved in major corporate acquisitions. The intricate dynamics between key players, financial considerations, and regulatory frameworks all play a significant role in shaping the outcome of these high-stakes negotiations. As the deadline for a decision looms closer, the future of Paramount Global hangs in the balance, waiting to see which bid will emerge victorious in this strategic showdown.