Investors backing Edgar Bronfman’s bid for Paramount Global include producer Steven Paul and John Paul Dejoria, who months ago had been working on their own offer, as well as child actor Brock Pierce and Nurali Aliyev, a Kazakh businessman and grandson of the former president of Kazakhstan. UK investment firm BC Partners and Fortress Investment Group are other names in the mix, Deadline has learned.
Edgar Bronfman Makes His Move With $4.3 Billion Bid For Paramount Global – Update
Pierce, who starred in The Mighty Ducks , is a big cryptocurrency player and founder of Tether whose legal woes have made headlines recently amid a barrage of lawsuits involving a former crypto lender and a failed hotel project in Puerto Rico.
Bronfman stepped in last night with an offer worth $4.3 billion , looking to disrupt a merger agreement between Skydance and Paramount announced July 7 that was set to be sealed at 11:59 p.m. ET on August 21 if no “superior” proposal arrived before then.
Bronfman’s letter to Charles Phillips, head of Paramount’s special board committee evaluating offers, asks to extend a so-called “go-shop period,” Deadline hears, which the committee can do for 15 days if a rival offer looks viable. It said the group still needs a few more days to present Paramount with signed financing commitments and a binding offer letter, Deadline has learned from someone with knowledge of the letter.
Bronfman is offering Shari Redstone $2.4 billion for her family holding National Amusements, which controls Paramount Global through its lock on Class A voting shares — the same sum agreed to by David Ellison’s Skydance. About $1.5 billion would flow to the company’s balance sheet to pay down debt — ditto for Ellison. The rest would go towards a $400 million breakup fee to Skydance.
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Bronfman offers no cash-out for Paramount’s army of Class B nonvoting shareholders. Ellison had set $4.5 billion to buy out some Class A and B shares for $23 and $15, respectively.
Paramount Global shares fell today in a down market after news of the bid but are off their lows.
Bronfman, the chair of Fubo, scion of the Seagram drinks empire and former head of Universal and Warner Music, is said to be pitching his offer as cleaner and less dilutive than Skydance’s, since it doesn’t include a merger. A Skydance second step after gaining control of Paramount calls for Par to buy it in a dilutive all-stock merger worth $4.5 billion.
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Regulators will need to look at that, but no major impediments are anticipated.
Members of Bronfman’s investor group said it would be prepared to commit about $5 billion in total capital, according to a person with knowledge of the letter.
“I think the board has to take a look at it. You don’t have the dilution. On the other hand you also don’t have half of the B stock being taken out,” says one Wall Streeter.
Paramount and Skydance, backed by Oracle co-founder Larry Ellison and RedBird Capital, started talking late last year and after some false starts and a messy process completed a deal last month. The back and forth was said to be related in part to Skydance coughing up some cash for shareholders besides Redstone.
Phillips, a former Wall Street banker, served as president of Oracle from 2003-2010.
NAI and Paramount have been directing queries to reps for Paramount’s special committee, which did not return requests for comment.
The Bronfman offer “should be indifferent to Redstone on a pure financial basis,” wrote Loop Capital analyst Alan Gould in a note today.
“It is cleaner and simpler in that it does not require PARA to pay up to buy an asset from the acquirer. However, it does not give the public the same opportunity to sell half their shares at an above market price,” he said. “Also, the [Paramount] Board will have to decide which asset mix it prefers, with the Skydance offer slightly more weighted to content creation, and which team it believes will be able to better run the ongoing company.”
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