Former top Seagram and Warner Music executive Edgar Bronfman Jr. has entered the fray to acquire Paramount Global, adding a new wrinkle to the auction of the storied Hollywood entertainment company.
Bronfman submitted a bid Monday to acquire the Redstone family holding company, National Amusements Inc., which controls the media conglomerate that owns CBS, MTV, Comedy Central and the storied Paramount film studio, for $4.3 billion, said a source familiar with the matter who was not authorized to comment publicly.
The offer comes a month after Shari Redstone and Paramount’s other board members approved a bid from tech scion David Ellison’s Skydance Media to buy Paramount in a multipronged transaction valued at $8.4 billion.
Bronfman made his offer just two days before Paramount’s window to accept alternative bids to Skydance’s proposal closed. Paramount’s special board committee must now weigh the two offers for the struggling media company.
Skydance’s deal allowed for a 45-day window during which Paramount could consider a competing offers.
The Wall Street Journal first reported Bronfman’s bid.
It’s not clear that Bronfman’s bid will be successful.
Shari Redstone has long preferred Ellison’s bid over other those of potential suitors, believing the 41-year-old entrepreneur possesses the ambition, experience and financial heft to lift Paramount from its doldrums. His father, Oracle Corp. co-founder Larry Ellison, also is backing his son’s effort to build a larger media empire. The plan is to merge Skydance and Paramount.
Under terms of the deal, Skydance and its financial partners RedBird Capital Partners and private equity firm KKR have agreed to provide a $1.5-billion cash infusion to help Paramount pay down debt. Their deal sets aside $4.5 billion to buy shares of Paramount’s Class B shareholders who are eager to exit. Non-Redstone shareholders would receive $23 a share to exit. Investors could maintain their shares in the new, larger entity.
The Redstone family would receive $1.75 billion for National Amusements — a company that holds the family’s Paramount shares and a regional movie theater chain founded during the Great Depression — after the firm’s considerable debts are paid off.
The subsequent all-stock merger of Skydance into Paramount values the former at $4.75 billion.
Bronfman’s bid also would provide the Redstone family with about $1.75 billion. However, it does not appear to envision a buyout plan for non-Redstone shareholders.
The late Sumner Redstone’s National Amusements was once valued at nearly $10 billion, but pandemic-related theater closures, last year’s Hollywood labor strikes and a heavy debt burden sent its fortunes spiraling. In the last five years, the New York-based company has lost two-thirds of its value.
Paramount has agreed to pay a $400-million breakup fee to Skydance if the deal doesn’t close.
Bronfman’s bid would cover that $400-million breakup fee.