Edgar Bronfman Jr., an American media entrepreneur, submitted a competing bid of around $4.3 billion to acquire control of Paramount Global by purchasing National Amusements Inc. (NAI), the holding company owned by Shari Redstone, which owns a majority stake in Paramount Global.
Bronfman's offer includes $2.4 billion in debt and equity for NAI, $1.5 billion in new equity for Paramount Global to reduce debt, and $400 million to cover the termination fee if Paramount chooses another offer.
Skydance Media and RedBird Capital Partners had previously made a $2.4 billion cash investment to acquire NAI, with the agreement involving buying out the Redstone family's stake in Paramount and merging into a publicly traded company.
Paramount Global's board had approved the Skydance Media merger offer, which included a 45-day "go-shop period" for Paramount to consider other offers before August 21. The deadline might be extended to September 5 by the board committee to determine if Bronfman's offer has a reasonable chance of success, raising the prospect of a bidding war with Skydance.
Paramount's board committee will meet to assess the likelihood of Bronfman's offer being successful. If Paramount selects another buyer during the go-shop period, they must pay Skydance a $400 million break-up fee. Shari Redstone, who controls NAI, is critical to the success of Bronfman's bid, and Charles Phillips, a Paramount director, is reportedly supportive of it.
Bronfman's bid does not include acquiring the remaining publicly traded shares of Paramount Global or making a bid for the non-voting PARA shares. Instead, it aims to maintain the current capital structure and shareholders' larger slice of the pie.
Paramount has struggled as viewers move towards streaming services over cable TV, and the company recently announced a 15% workforce cut in the U.S., indicating opportunities for digital media players.
Paramount Global's board and Bronfman have declined to comment on the offer.
This article was written in collaboration with Generative AI news company Alchemiq
Sources: NYTimes, CNBC, Bloomberg, Reuters, Nypost, Ilsole24ore, Yahoo Finance, Seekingalpha, Usinenouvelle, WIONews, Boursier, Boursedirect.