Edgar Bronfman Jr. submits bid to acquire Paramount
As a seasoned moviegoer and industry observer with decades of insights under my belt, I find myself intrigued by the latest twist in the Paramount Global acquisition saga. The entry of Edgar Bronfman Jr., a heavyweight from the world of music and liquor empires, adds an exciting layer to this Hollywood tale.
Edgar Bronfman Jr., an ex-leader at Seagram and Warner Music, is now in the running to buy Paramount Global, introducing a fresh twist to the bidding process for this iconic Hollywood entertainment firm.
On Monday, Bronfman put forth an offer worth $4.3 billion to buy National Amusements Inc., the holding company owned by the Redstone family. This company oversees a media empire that encompasses CBS, MTV, Comedy Central, and the iconic Paramount film studio, according to a source who spoke on condition of anonymity and is not permitted to make public comments about the matter.
A month following the approval by Shari Redstone and other board members at Paramount, an offer was made by tech heir David Ellison’s Skydance Media for the acquisition of Paramount in a complex deal worth $8.4 billion.
Two days prior, Bronfman submitted his proposal, as Paramount’s deadline for considering other bids in response to Skydance’s offer was approaching. Now, the special board committee at Paramount needs to evaluate both proposals for the ailing media company.
Skydance’s agreement provided a 45-day period where Paramount had the option to evaluate alternative proposals.
The Wall Street Journal first reported Bronfman’s bid.
A Paramount spokesperson declined to comment.
It’s not clear that Bronfman’s bid will be successful.
Shari Redstone has consistently favored Ellison’s proposal over others from potential buyers. She believes that the 41-year-old businessman, with his drive, experience, and financial resources, can help revive Paramount out of its slump. Moreover, Larry Ellison, co-founder of Oracle Corp., is also supporting his son’s endeavor to expand a media empire. The strategy involves combining Skydance and Paramount.
As a passionate movie enthusiast, I’d put it like this: In a joint venture, Skydance, along with RedBird Capital Partners and KKR, have struck a deal to inject a whopping $1.5 billion into Paramount to help them manage their debt. This deal also sets aside an impressive $4.5 billion for the purchase of Class B shares from Paramount’s shareholders who are looking to move on. For those who aren’t Redstone shareholders, they would be offered around $23 per share as a way out. Investors have the option to keep their shares in the expanded company that will emerge from this deal.
After settling all its outstanding debts, the Redstone family stands to gain approximately $1.75 billion from National Amusements – a business that owns their Paramount shares and a cinema chain established during the Great Depression, which specializes in regional movies.
The subsequent all-stock merger of Skydance into Paramount values the former at $4.75 billion.
In simpler terms, if Bronfman’s offer is accepted, the Redstone family stands to receive approximately $1.75 billion. However, this proposal seems not to include a plan for purchasing shares from non-Redstone shareholders.
Originally worth close to $10 billion, Sumner Redstone’s National Amusements faced a steep decline in recent times due to theater closures because of the pandemic, labor disputes in Hollywood during the previous year, and a significant amount of debt. Over the last five years, this New York-based company has seen about two-thirds of its value diminish.
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.
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2024-08-20 16:01