Shares of Paramount Global jumped more than 7% on Thursday after The Wall Street Journal reported that Edgar Bronfman Jr., the former chief executive of Warner Music Group, is preparing a potential bid for the media giant and National Amusements, the holding company of controlling shareholder Shari Redstone.
The outlet notes that the media executive has held discussions with Fortress Investment Group, Roku and “Baby Geniuses” producer Steven Paul, who previously assembled an investor group to explore his own potential bid, about backing the offer, which could be made in the coming days. Discussions are reportedly ongoing and may not lead to a formal bid.
The Journal previously reported that Bronfman Jr. was looking to offer between $2 billion and $2.5 billion for NAI, which controls 77% of Paramount’s class A voting stock and 5.2% of its class B common stock, in a bid backed by Bain Capital. However, that bid did not materialize.
The move comes ahead of the expiration of the 45-day go-shop provision in Skydance Media’s $8 billion merger deal struck last month, in which Paramount would pay a $400 million breakup fee in the event that it receives a better offer from another bidder that Skydance doesn’t match. That window expires on Aug. 21 at 11:59 p.m, but can be extended to Sept. 5 in the event that the media conglomerate’s independent special committee enters talks with a rival bidder that it has “determined in good faith is or would reasonably be expected to lead to a Superior Proposal.”
According to the Journal, Bronfman Jr. is planning to give shareholders the option of owning more of the company than they would under the Skydance deal and has discussed bringing in new partners from the technology and other industries for possible strategic partnerships.
Roku and Fortress Investment Group declined to comment. Representatives for Bronfman Jr., Waverly Capital, a venture capital firm where Bronfman serves as chairman and general partner, Bain Capital and Paul did not immediately return TheWrap’s request for comment.
Under the terms of the Skydance deal, which is expected to close in the third quarter of 2025 subject to regulatory approval and other customary closing conditions, NAI will receive $2.4 billion, including $1.75 billion for the equity and the assumption of $650 million in debt, while non-NAI shareholders will receive $4.5 billion. Meanwhile, $1.5 billion in new capital will be used to pay down Paramount’s $14.6 billion in long-term debt and recapitalize its balance sheet.
Class A shareholders can elect to receive $23 cash per share or 1.5333 shares of Class B stock of new Paramount. Class B shareholder can elect to receive $15 per share or one share of Class B stock of new Paramount, which is subject to proration if those elections exceed $4.3 billion in aggregate. If shares are elected over cash, reducing the cash required to under $4.3 billion, the $1.5 billion of cash going to Paramount’s balance sheet could grow up to a cap of $3 billion.
Skydance’s consortium of investors, which include RedBird Capital Partners and the Ellison family, will control 70% of shares outstanding and have 100% voting ownership in new Paramount, which will remain public. New Paramount will have an enterprise value of $28 billion, while Skydance is being valued at $4.75 billion. Approximately $6 billion of the deal’s total financing is coming from David’s father and Oracle co-founder, Larry Ellison.
The Skydance deal has faced pushback from investors over concerns that it would prioritize Redstone at the expense of Paramount’s minority shareholders.
Mario Gabelli, the largest class A shareholder behind Redstone whose GAMCO Investors Inc. represents clients that own 5 million Class A shares and 1 million Class B shares, has filed a books and records request seeking more information about the specifics of the deal.
Meanwhile, the Employees’ Retirement System of Rhode Island has asked a Delaware court to order Paramount to turn over documents and communications related to its talks with Skydance, due to concerns that Redstone may be interfering with the board’s ability to find the best deal for shareholders.
Additionally, Paramount investor Scott Baker has filed a proposed class-action lawsuit, arguing the Skydance deal is a breach of Redstone and the Paramount board’s fiduciary responsibilities and that non-NAI class B shareholders will suffer $1.65 billion in damages from the Skydance deal.
In the meantime, Paramount co-CEOs Brian Robbins, Chris McCarthy and George Cheeks have embarked on a long-term strategic plan that includes $500 million in cost cuts, divesting assets and streaming partnerships.
On Tuesday, the company began its first of three phases of layoffs, which will impact 15% of Paramount’s total U.S. workforce and be 90% completed by the end of September. Previously announced areas that will be impacted include marketing and communications, finance, legal, technology and other support functions.
As part of that move, the company is shutting down Paramount Television Studios by the end of this week, with all of its current series and development projects — such as Prime Video’s “Cross” and Apple TV+’s “Before” and “Murderbot” — set to transition to CBS Studios.
Paramount has also hired bankers to explore possible asset sales and is in “active discussions” about potential strategic partnerships or joint ventures. TheWrap exclusively reported that Paramount sold the ComicBook and PopCulture websites to Nashville-based Savage Ventures for an undisclosed amount. Four individuals familiar with the co-CEOs’ plans previously told TheWrap that other possible assets that could be put up for sale include Pluto TV, BET, VH1 and the Paramount lot, which would be leased back for the studio’s use.
Shares of Paramount have fallen 28% in the past year, 23% year to date and 12.9% in the past six months.
Leave a Reply