Edgar Bronfman Increases Offer for Paramount Global to $6 Billion, Threatening Skydance's Acquisition Plans

LOS ANGELES - Edgar Bronfman, a seasoned media executive, has made a higher bid of $6 billion to acquire the controlling shareholder, National Amusements, as well as a minority stake in Paramount Global, according to sources familiar with the matter. This revised offer by Bronfman, who had previously proposed $4.3 billion, has caused shares of Paramount to rise by over 2.4% after the market closed.

In a statement released on Wednesday, Paramount confirmed receiving an acquisition proposal from Bronfman on behalf of an investor consortium, without disclosing specific terms. The increased bid now poses a significant challenge to the planned acquisition of Paramount by tech mogul David Ellison and his company Skydance Media.

Bronfman's new offer includes $3.2 billion in funds that can be used to pay off Paramount's debts or purchase non-voting shares from investors other than the Redstone family, at a rate of $16 per share. The anonymous source who provided this information emphasized that the allocation of these funds would be determined jointly by the board and the investor group led by Bronfman.

This offer comes in direct competition with Skydance's elaborate two-step transaction worth $8.4 billion. Skydance's proposed acquisition involves Paramount acquiring Ellison's independent media firm, Skydance Media, in an all-stock transaction. Ellison and his partner, RedBird Capital Partners, have pledged to invest $4.3 billion to purchase Paramount's Class B shares for $15 each and committed to providing a minimum of $1.5 billion to enhance the company's financial position.

Bronfman's bid of $2.4 billion, in both debt and equity, matches the terms set by Skydance's purchase agreement for National Amusements, which controls Paramount through its ownership by the Redstone family. In the acquisition proposal submitted to Paramount special committee Chairman Charles Phillips on Monday, Bronfman argued that his offer is superior due to the elimination of risks and costs associated with integrating Paramount and Skydance. Moreover, his offer includes covering the $400 million break fee owed to Skydance if successful.

Analyst Rich Greenfield from LightShed Partners noted in a recent research note that multiple board members appeared to support a bid excluding the dilution caused by Skydance. However, both Skydance and Bronfman's team refrained from commenting on the matter.

Bronfman's investor group includes Fortress Investment Group and Jeff Ubben, founder of Inclusive Capital Partners, as mentioned in a letter seen by Reuters on August 19. Notably, cryptocurrency entrepreneur Brock Pierce and Kazakhstan investor Nurali Aliyev, previously part of the Bronfman group, were no longer listed among the investors in revised documents provided to Paramount's board.

To allow Paramount to explore other offers, Skydance and Paramount had agreed to a 45-day "go-shop" period. The special board committee has now extended the deadline for Bronfman's consortium until September 5, giving the Ellison-led group an opportunity to submit a counter-offer, according to the anonymous source.

The Wall Street Journal was the first to report on Bronfman's improved offer, which now presents a compelling alternative to Skydance's acquisition plans for Paramount Global.