Paramount extends deal talks with Bronfman after new $6B bid
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Paramount is pushing back the deadline for rival bidders to beat out Skydance's deal for the company following a $6 billion offer from Edgar Bronfman Jr.
Why it matters: Bronfman is now a real threat to scuttle the $8 billion agreement and prolong an already lengthy negotiation.
- National Amusements Inc. (NAI), which controls 77% of Paramount's voting power, began talking with Skydance about a deal last December.
State of play: Bronfman, who earlier this week submitted a $4.3 billion bid, revised his offer hours before the deadline was set to expire Wednesday afternoon, a source familiar with the bid told Axios.
- As part of its deal with Skydance, there was a 45-day "go-shop" period that allowed Paramount's special committee to evaluate possible deals to review incoming offers that are superior to Skydance.
- That window has now been extended to Sept. 5, the committee said in a statement. The New York Times had earlier reported on the extension.
- Bronfman's new bid adds an additional $1.7 billion to the $1.5 billion in equity for the company that it originally committed for a total of $3.2 billion, a source said.
- That $3.2 billion can be used to either fund a cash tender for Class B at $16 per share or to add to Paramount's balance sheet. That allocation is subject to a future negotiation between Bronfman's investor group and the special committee.
Between the lines: Bronfman believes his bid is competitive, even though it's smaller than Skydance's $8 billion+ deal, because it doesn't include a $4.5 billion valuation for Skydance, which dilutes Paramount shareholders, a source familiar with his thinking said.
Yes, but: Full details about Bronfman's additional backing have not been disclosed.
- Axios reported Tuesday that Bronfman's investor group includes Steven Paul, the producer behind "Baby Geniuses," "Ghost Rider" and "Bratz"; Fortress Investment Group; BC Partners Credit; and a slew of family offices and individual entrepreneurs, including Brock Pierce and Nurali Aliyev.
What's next: Bronfman now has until early September to convince Paramount that he's a better dance partner than David Ellison.
- Skydance also has the right to improve its bid.
