Edgar Bronfman Jr. makes $4.3bn bid for Paramount, challenging Skydance deal (Report)

Edgar Bronfman Jr. has submitted a $4.3 billion offer to acquire Paramount Global, aiming to derail the company’s impending merger with Skydance.

That’s according to multiple news outlets, including The Wall Street Journal, which first reported on the bid on Monday (August 19).

Bronfman’s proposal includes a $2.4 billion payment to Shari Redstone’s National Amusements, which controls Paramount Global, and a $1.5 billion injection into the company’s balance sheet to reduce debt and maintain investment-grade status, Deadline reported.

Additionally, a $400 million breakup fee would be paid to Skydance, the report said.

Skydance and Paramount agreed to merge in July in a deal valued at $8 billion. The transaction would value the combined entity at about $28 billion.

“Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment. As a longtime production partner to Paramount, Skydance knows Paramount well and has a clear strategic vision and the resources to take it to its next stage of growth,” Shari Redstone, Chair of Paramount Global and Chair, President, and CEO of National Amusements, said in July.

Unlike the Skydance deal, Bronfman’s offer would not acquire all Paramount shares, focusing solely on Redstone’s controlling stake, Deadline reported. The Skydance proposal, on the other hand, involved a $4.5 billion buyout of all Class A shares and a portion of Class B shares, a deal that faced significant shareholder backlash due to its perceived favoritism towards Redstone.

A Paramount shareholder, Scott Baker, filed a lawsuit to halt the company’s merger with Skydance in July. Baker alleges that the deal is primarily designed to benefit Redstone at the expense of other shareholders.

“That payout is only worth $12.23 per Paramount Class B share. Thus, when the merger closes, the non-NAI Class B shareholders will suffer $1.65 billion in damages,” the lawsuit claimed.

Meanwhile, the proposed offer by Bronfman is seen as a counteroffer to the Skydance merger, which is set to close on Wednesday night (August 21) unless a “superior” proposal emerges. The agreement allows for a 15-day period, with an option for a 15-day extension, to explore any rival deals.

Bronfman’s offer comes about a year after the quiet closure of his SPAC, Waverley Capital Acquisition Corp 1. The executive launched the $200 million SPAC in August 2021 to “acquire a high-caliber company in the media, entertainment and technology space.”

Bronfman was the Chairman and/or CEO of Warner Music Group between 2004 and 2012.

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