Summary of Bronfman's Paramount bid could keep Shari Redstone involved at the company

  • cnbc.com
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    Edgar Bronfman Jr.'s Bid for Paramount Global

    Edgar Bronfman Jr., former head of Universal and Warner Music, has made a last-minute bid to take over Paramount Global, challenging Skydance Media's $8 billion merger deal. This eleventh-hour offer comes with a twist: Bronfman is open to having Shari Redstone, currently non-executive chairman at Paramount, remain involved with the company if his consortium's bid for National Amusements, the controlling shareholder, is successful.

    • Bronfman's offer is for $6 billion, which would give cash to about 20% of Class B holders at $16 per share.
    • Skydance's bid includes a payout of about 50% of current Paramount common investors at $15 per share.

    Paramount Global's Future: A Battle of Bids

    The Paramount Global special committee has been tasked with deciding whether Bronfman's offer is a superior proposal for shareholders by August 28. If they deem it better, Skydance will have four business days to match. The entire process is expected to be concluded by September 5.

    • Both bids include plans to buy out a percentage of Paramount Global common shareholders.
    • It is unclear whether Redstone favors one offer over the other.

    Skydance's Merger and the Extended Go-Shop Period

    Skydance Media had previously agreed to an $8 billion deal to merge with Paramount Global, but the Paramount Global special committee extended the so-called "go-shop" period to review Bronfman's initial bid.

    • The extended "go-shop" period allows for the consideration of competing offers.
    • Skydance's lawyers have sent a letter demanding that Paramount Global stop negotiating with Bronfman, arguing that Bronfman's bid doesn't meet the criteria for a superior proposal.

    Bronfman's Consortium and Potential Regulatory Concerns

    Bronfman has spent the last few weeks assembling a consortium of investors interested in owning a piece of Paramount Global. This includes film producer Steven Paul, Patron cofounder John Paul DeJoria, Fortress Investment Group, and former Turner Broadcasting CEO John Martin.

    • Bronfman's financing comes from various sources, potentially triggering regulatory concerns if too much of the money is from foreign entities.
    • The diverse financing sources could also make Bronfman's offer riskier than Skydance's bid, which is backed by RedBird Capital and Larry Ellison.

    Shari Redstone's Role and Potential Influence

    Jon Miller, a close ally of Redstone and former AOL CEO, is part of Bronfman's consortium and would likely take a role with the company if Bronfman's deal is accepted. This could potentially give Redstone more control over a future Paramount Global than she would have with Skydance.

    • Redstone has not spoken with Miller about the bid.
    • Despite past interactions, Redstone and Bronfman don't have a close preexisting relationship.
    • Redstone is taking a wait-and-see approach to any future involvement she may want to have in Paramount Global, regardless of ownership.

    The Future of Paramount Global: A Battle of Visions

    The outcome of this bidding war will determine the future of Paramount Global. Both Bronfman and Skydance have different visions for the media giant, with implications for its streaming strategy, content production, and overall direction.

    • Bronfman's consortium includes individuals with expertise in various areas, including film production, streaming, and media management.
    • Skydance's bid offers a potential merger with a company known for its success in blockbuster films and television series.

    The Significance of Paramount Global's Ownership

    The battle for control of Paramount Global has significant implications for the media landscape. Paramount Global is a major player in the entertainment industry, with a portfolio of assets that includes Paramount Pictures, CBS, Showtime, MTV, and Nickelodeon.

    • Paramount Global is a significant force in the streaming world, competing with other giants like Netflix, Disney+, and HBO Max.
    • The company's future direction will shape the landscape of content creation and distribution.

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