A rogue billionaire enters the Paramount sale conversation

Paramount Global’s merger with Skydance may not be a done deal just yet. David Ellison’s acquisition of the legendary studio would become official on Wednesday barring any other suitor coming at the last minute. And wouldn’t you know, Edgar Bronfman, Jr. swooped in with a competing offer just ahead of the deadline, according to Deadline. The special committee of Paramount’s board of directors now has the option to press pause on the Skydance deal to explore Bonfman’s offer through September 5 in order to decide which is the “superior” offer. 

Bronfman is the heir to the Seagram’s fortune and was once CEO of the family business, but he also has ties to the entertainment industry, having produced films in the past and served as the CEO of Warner Music Group from 2004 to 2011. He’s currently the chairman of FuboTV. Bronfman reportedly made a $4.3 billion offer for Paramount. $2.4 million of that would go directly to Shari Redstone, whose family company National Amusements owns the controlling share of Paramount Global. $1.5 billion would go towards “[paying] down some debt and [ensuring] investment grade,” per Deadline. And “most of the rest” would go towards the $400 million breakup fee with Skydance. 

How does this stack up against Skydance’s $4.5 billion offer? For one thing, Bronfman’s offer apparently wouldn’t take out any other shareholders, while Skydance’s offer would “buy out all Class A and a chunk of B shares.” For another, Bronfman has reportedly argued that his offer is superior because it wouldn’t require Paramount to absorb another company (i.e., Skydance Media), per CNN. That might be worth considering since Paramount already has to consider jettisoning assets (for instance, BET Media Group) in order to stay afloat. Crucially, Bronfman’s offer wouldn’t dilute existing investors’ shares, which will occur if and when Skydance merges with Paramount in an all-stock transaction.

Nevertheless, there are similarities to these deals: Ellison and Bronfman are both backed by family money, and both have entertainment experience under their belts. Both deals offer Shari Redstone a big payday, which bothered some shareholders during the Skydance negotiations (according to Deadline), because it seemed like she was the only one getting out good. Redstone is said to prefer the Skydance deal because she likes David Ellison, which is probably why that deal managed to persevere despite falling apart completely in June. But Deadline reports that the Bronfman offer is backed by Paramount director Charles Phillips, who sources say was “instrumental” in tanking that first Skydance offer in June. Ultimately, though, Redstone still has the final decision in the sale, so it’ll be up to her to decide what offer is the most attractive.