Scoop: Edgar Bronfman Jr. raises $5.5B to bid for Paramount
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Edgar Bronfman Jr. at the 2018 Tribeca Film Festival in New York City. Photo: Gary Gershoff/WireImage
Edgar Bronfman has raised a total of $5.5 billion for a bid for Paramount Global's parent, National Amusements Inc. (NAI), a source familiar with the process tells Axios.
The big picture: Bronfman submitted an initial $4.3 billion bid Monday night to meet a deadline that would put his offer in for consideration. He plans to submit a higher bid in the coming days.
State of play: The bid could scuttle an $8 billion agreement struck last month between Paramount and Skydance Media.
- It would also draw out an already long and complicated sale process for Paramount. NAI, which controls 77% of Paramount's voting power, began talking with Skydance about a deal last December.
Yes, but: A bid for $5.5 billion is still much smaller than Skydance's $8 billion deal, but Bronfman believes his bid could win out because it doesn't include a $4.5 billion valuation for Skydance Media, which dilutes Paramount shareholders, the source says.
The latest: Bronfman submitted the proposal two days before the end of a 45-day "go-shop" period that allows Paramount's special committee to consider superior bids to the Skydance deal.
- Paramount's special committee is expected to review the bid on Wednesday. Bronfman expects the 45-day "go shop" window to be extended as he increases his bid value, the source says.
- He raised more capital from several high-net-worth individuals and family offices shortly following reports of his initial bid.
By the numbers: Bronfman's initial bid includes $2.4 billion for NAI ($1.75 billion in equity and $650 million in debt) and $1.5 billion to add to Paramount Global's balance sheet to pay down the firm's debt, the source confirms.
- The $1.5 billion investment matches the commitment Skydance, along with its financing partner RedBird Capital Partners, made to invest in Paramount via its offer last month.
- It also covers the $400 million breakup fee associated with the Skydance deal, which still requires regulatory approval.
- Bronfman's proposal doesn't include any immediate cash out for class B shareholders of Paramount.
Between the lines: Bronfman has been in talks with financing and strategic partners to join his bid, Axios has reported, including Steven Paul, the producer behind "Baby Geniuses," "Ghost Rider" and "Bratz."
- A list of deal partners obtained by Axios includes Paul, Fortress Investment Group, BC Partners Credit, and a slew of family offices and individual entrepreneurs, including Brock Pierce and Nurali Aliyev.
- The Wall Street Journal, which first reported the details of the new bid, had previously reported that Bronfman had been in touch with private equity firm Bain Capital and Roku about joining the bid.
- Paramount, Paramount's special committee, Redbird Capital Partners, Bronfman's private investment firm Waverly Capital and Crystal Sky did not immediately respond to a request for comment. NAI declined to comment.
Flashback: While Bronfman's plans to turn Paramount around aren't clear, a source familiar with his thinking says he would plan to assume the role of CEO if his bid proved successful.
- The former Vivendi executive started his career in production. Today, he chairs sports streaming firm FuboTV, one of Waverley Capital's portfolio companies. He led an investment group's bid for Time Inc. in 2017 that was ultimately unsuccessful.
- Skydance Media has presented a plan to transform Paramount Global by cutting costs, finding partners to scale its streaming ambitions and investing in Paramount's top franchises.
What to watch: Paramount's special committee could extend the "go-shop" period by a few days to give Bronfman's bid more time.
