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 Bronfman’s bid is successful, he is open to allowing Redstone, who currently serves as the non-executive chairman at Paramount, to remain involved with the company. This move comes as a part of Bronfman’s consortium’s bid for National Amusements, the controlling shareholder of Paramount as reported by sources familiar with the matter.
Bronfman has managed to raise a substantial $6 billion to challenge Skydance Media for ownership of National Amusements, the holding company established by Sumner Redstone. Both Bronfman’s bid and Skydance’s bid include provisions to buy out a portion of Paramount Global common shareholders. Bronfman’s bid, totaling $6 billion, would provide cash to roughly 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. The Paramount Global special committee is set to evaluate Bronfman’s offer and determine if it represents a superior proposal for shareholders by Aug. 28.
It remains unclear if Shari Redstone favors one offer over the other. However, it is anticipated that Redstone may have more control over Paramount Global in the future if Bronfman’s bid is accepted due to her close ally Jon Miller being a part of Bronfman’s consortium. Miller has played a key role in connecting Bronfman with potential capital and would likely hold a position within the company under Bronfman’s leadership, possibly a board seat along with an operational role. If Bronfman’s deal goes through, he is expected to take on the CEO position within the company.
Bronfman’s financing for the bid comes from various sources, which could potentially raise regulatory concerns if a significant portion of the money originates from foreign entities. The diverse pool of financiers backing Bronfman’s offer may also pose more significant risks compared to Skydance’s bid, which is supported by private equity firm RedBird Capital and Larry Ellison, a prominent billionaire. This diverse financing structure might have implications on the overall attractiveness and stability of Bronfman’s offer in comparison to Skydance’s bid.
Skydance CEO David Ellison has engaged in discussions with Redstone regarding the potential for her to stay on as a shareholder of a combined Skydance-Paramount Global entity. Despite the ongoing competition and bidding war, Redstone is adopting a wait-and-see strategy regarding any future involvement she may desire with Paramount Global. Recently, Skydance has raised concerns about the Paramount Global special committee negotiating with Bronfman. Skydance has argued that the special committee did not have the authority to extend the go-shop process and that the criteria for a superior proposal were not met by the Bronfman bid.
Edgar Bronfman Jr.’s bid for a controlling stake in Paramount Global signifies a pivotal moment for the entertainment industry. The bid not only showcases the fierce competition for ownership but also highlights the intricate dynamics involved in shaping the future of a media conglomerate like Paramount. As the bidding war unfolds, all eyes are on the Paramount Global special committee’s decision and the subsequent actions of the involved parties, which will ultimately determine the fate and direction of one of the leading entertainment companies in the world.