Edgar Bronfman Jr.
Cameron Costa | CNBC
Edgar Bronfman Jr.’s proposed acquisition of control Paramount Global If the bid is successful, it could help keep Shari Redstone at the company.
According to a person familiar with the matter, Paramount is open to keeping Redstone, who is currently Paramount’s non-executive chairman, at the company if Paramount’s special committee accepts his consortium’s takeover bid for National Amusements, the company’s controlling shareholder.
Mr. Bronfman has raised $6 billion to challenge Skydance Media for ownership of National Amusements Inc., a holding company founded by Sumner Redstone, according to people familiar with the matter. Both Mr. Bronfman’s bid and Skydance’s bid also include funds to buy out a percentage of Paramount Global’s common stock.
Bronfman’s deal is valued at $6 billion, with about 20% of Class B shareholders receiving $16 a share in cash. Skydance plans to pay $15 a share to about 50% of Paramount’s current common stock investors as part of the proposed deal, the people said.
It’s unclear which proposal Redstone prefers. Paramount Global’s special committee has until Aug. 28 to decide whether Bronfman’s proposal is the better offer for shareholders. If the committee decides Bronfman’s proposal is better, Skydance has four business days to respond. The deadline for the entire process is Sept. 5.
Bronfman still has a few days to raise additional capital to compete with Skydance, which last month agreed to an $8 billion deal to merge with Paramount Global Inc. The special committee earlier this week extended by 15 days the so-called “go-shop” period during which it can consider competing proposals and will consider Bronfman’s first proposal.
One of the people on Bronfman’s bid is former AOL CEO John Miller, who has suggested Redstone could have more control over a future Paramount Global than he has at Skydance. Miller, a Redstone confidant, has introduced Bronfman to potential capital and would likely take a role, such as a board seat or operating role, if the company comes under Bronfman’s control, according to people familiar with the matter. Bronfman would become CEO of the company if the bid is approved and goes through, the people said.
Miller, Redstone and Redstone’s son-in-law, Jason Ostheimer, co-own Advansit Capital, a small venture capital firm that invests in media and technology. The company’s website. Miller also served as Redstone’s de facto strategic adviser for many years, according to people familiar with the matter.
Mr. Redstone has not discussed a bid with Mr. Miller, according to a person familiar with the matter.
While the Redstones and Bronfmans have similar friendships, including large donations to Jewish foundations, Edgar Bronfman Jr. and Shari Redstone have not met often and were not previously close, two people familiar with the matter said.
Skydance CEO David Ellison and Redstone have had several discussions about the possibility of Redstone remaining a shareholder in a combined Skydance-Paramount Global company, according to people familiar with the matter.
Regardless of her ownership interest in Paramount Global, Ms. Redstone is taking a wait-and-see approach to her future involvement in the company, according to a person familiar with her thinking.
Spokespeople for Redstone, Bronfman, the Paramount Global special committee and Skydance all declined to comment.
The 11th hour bid
In recent weeks, Mr. Bronfman has been rounding up individuals interested in buying a stake in Paramount Global, including some who have previously considered the deal, such as film producer Steven Paul and Patron co-founder John Paul DeJoria, according to people familiar with the matter, as well as Fortress Investment Group, the credit arm of private-equity firm BC Partners, and former Turner Broadcasting CEO John Martin.
Bronfman’s money comes from a variety of sources that could raise regulatory concerns if most of it comes from foreign companies. And having so many different backers could make his proposal riskier than a bid from Skydance, which is backed by private equity firm RedBird Capital and David Ellison’s billionaire father, Larry Ellison.
Bronfman is Fubo, Founder of the sports streaming service and former head of Universal Music and Warner Music.
Skydance’s lawyers sent a letter to the Paramount Global special committee demanding that the company stop negotiating with Bronfman, The Wall Street Journal reported. It was reported on Thursday. Skydance reportedly claimed that Paramount Global violated the terms of the go-shop agreement by failing to notify Skydance of its plans to extend the contract.
Skydance also argued that the special committee had no right to extend the go-shop because bids must be “reasonably expected to lead to a superior proposal.” Skydance argued that Bronfman’s bid did not meet that standard.
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