The future of Paramount Global has been thrown into uncertainty with a competing offer from Edgar Bronfman Jr. The special committee at Paramount has decided to extend the “go shop” period by 15 days to review the new offer from Bronfman. Initially, Bronfman offered $4.3 billion for National Amusements, the controlling shareholder of Paramount, with the intention of acquiring a minority stake. However, Bronfman raised more funds and submitted a revised offer of $6 billion, seeking to supersede Paramount’s merger agreement with Skydance Media.
The special committee confirmed the receipt of an acquisition proposal from Bronfman, extending the “go shop” period for the Bronfman Consortium until September 5, 2024. The committee reached out to more than 50 third parties during the initial “go shop” period, but the Skydance buying consortium, which includes RedBird Capital Partners and KKR, had already agreed to invest over $8 billion into Paramount.
Bronfman’s initial bid proposed an equity deal valued at $1.75 billion for National Amusements, including a $1.5 billion investment in Paramount’s balance sheet and covering the $400 million breakup fee owed to Skydance. The revised offer now includes $1.7 billion for a tender offer, giving non-Redstone, nonvoting Paramount shareholders the option to receive $16 a share. Bronfman, with his background in Warner Music and Seagram, has made a substantial play for Paramount amidst the ongoing negotiations.
The merger agreement between Paramount and Skydance has faced scrutiny from shareholders, with money manager Mario Gabelli and investor Scott Baker raising concerns. Gabelli reportedly filed a lawsuit to access Paramount’s books related to the deal, possibly in preparation for further legal action. Baker, on the other hand, has sued to block the deal, arguing that it would cost shareholders $1.65 billion.
The uncertain future of Paramount Global hangs in the balance as the special committee navigates through competing offers and shareholder grievances. The outcome of the extended “go shop” period and the potential impact of Bronfman’s bid will shape the trajectory of the company in the coming days. With significant investments and legal challenges on the horizon, Paramount’s fate remains up in the air.
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