Bronfman's Increased Offer for Paramount
Veteran media executive Edgar Bronfman has increased his takeover bid for Paramount Global to a substantial $6 billion, according to sources close to the matter. This represents a significant increase from his previous offer of $4.3 billion. Following this news, Paramount's shares experienced a 2.4% rise in after-hours trading, indicating investor optimism about the potential deal.
Details of the Takeover Proposal
Bronfman's new proposal involves acquiring National Amusements, the controlling shareholder of Paramount, along with a minority stake in the company. The offer comprises $3.2 billion intended to either reduce Paramount's debt or buy non-voting shares from investors, providing $16 cash per share. The allocation of these funds would be determined by both the board and Bronfman's investor group.
Comparison with Skydance Media's Offer
This bid competes with a planned acquisition by David Ellison's Skydance Media, which had proposed a more complex $8.4 billion deal. Skydance's proposal involved a two-step process requiring Paramount to acquire Ellison's media company in an all-stock transaction. Additionally, Ellison and Redbird Capital Partners committed $4.3 billion to buy Paramount's Class B shares at $15 each, with an extra $1.5 billion pledged to the company's balance sheet.
Strategic Advantages of Bronfman's Bid
Bronfman argues that his offer is superior due to its ability to avoid the risks and expenses associated with integrating Paramount and Skydance. His proposal includes covering a $400 million break fee owed to Skydance, should his deal succeed. Analyst Rich Greenfield from LightShed Partners notes that several board members seem to favor Bronfman's bid to avoid dilution from Skydance's offer.
Investor Group and Market Reaction
Bronfman's group includes notable investors such as Fortress Investment Group and Jeff Ubben of Inclusive Capital Partners. Former members, including cryptocurrency entrepreneur Brock Pierce and Kazakhstan investor Nurali Aliyev, are no longer part of the group. The revised documents submitted to Paramount list 65 other potential investors approached by Bronfman.
Next Steps in the Acquisition Process
Paramount's special board committee extended the deadline to September 5 for Bronfman's group to refine their proposal. Meanwhile, Skydance still has the opportunity to respond with a counter-offer. The Wall Street Journal initially reported Bronfman's enhanced bid, highlighting the ongoing interest and competition for control of Paramount.
As the takeover battle unfolds, market observers are keenly watching the strategic moves of both Bronfman and Ellison to determine who will ultimately gain control of one of the most storied names in media.