Edgar Bronfman Submits $4.3 Billion Bid for Redstone’s National Amusements, Paramount Stake
Media executive Edgar Bronfman Jr. is formally making his play for Shari Redstone’s media empire, in an attempt to scuttle a previous agreement to merge Paramount Global with David Ellison’s production company Skydance Media.
Bronfman has submitted a $4.3 billion offer for National Amusements, the company through which Redstone’s family controls the media giant, and a minority stake in Paramount Global, according to people familiar with the situation.
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In a letter to Charles Phillips, chair of Paramount’s special committee of directors, Bronfman wrote that his investor group believes that Paramount’s business is “far more valuable” than what Skydance is paying. He also wrote in the letter, which was viewed by The Wall Street Journal, that his proposal “eliminates the risks, uncertainties and costs of combining Paramount with Skydance.”
As part of the offer, Bronfman has proposed buying National Amusements in an equity deal valued at $1.75 billion, equal to what Skydance has offered for Redstone’s company, plus investing $1.5 billion onto Paramount’s balance sheet, also similar to what Skydance has offered, the people said. Including debt, Bronfman’s offer for National Amusements is $2.4 billion.
The figure also would cover a $400 million breakup fee owed if Paramount chooses to go with an offer other than Skydance’s.
Bronfman, who formerly ran Warner Music and liquor giant Seagram, said in a separate letter to Phillips that he has secured financing commitments of about $5 billion from an array of individuals and companies including Fortress Investment Group; BC Partners Credit, crypto investor and former child actor Brock Pierce; longtime activist investor Jeff Ubben and his wife, Laura Ubben; and Duty Free Americas Chairman Simon Falic.
The letter notes that all 19 backers listed, including Bronfman, are prepared to commit the financing pending “if applicable, the final approval of their respective investment committee or governing body.”
The new offer marks the latest twist in a monthslong effort to sell Paramount, which owns CBS, cable networks Comedy Central and Nickelodeon, the Paramount+ streaming service and its namesake movie studio.
Now it is up to Paramount’s special committee to decide if Bronfman’s bid “is or would reasonably be expected to lead to a superior proposal,” relative to Skydance’s offer, and thus warrants extending the “go-shop period”—a time frame during which other potential buyers can make offers and which is slated to end on Wednesday.
Should Bronfman receive the blessing of the special committee, he is preparing to submit a higher bid in the coming days, the people said. As of Tuesday morning, he had raised a total of $5.5 billion, they said.
Bronfman’s pitch is that his deal is better for Paramount shareholders because they wouldn’t be diluted like they would be in the Skydance deal, under which Paramount would buy Skydance in an all-stock transaction. Many Paramount shareholders have voiced concerns about the Skydance deal because they say it is a sweetheart deal for Redstone.
Bronfman also argues that if his bid were accepted, Paramount would have an independent governance structure with a majority independent board of directors on day one. His plan is also to collapse Paramount’s vote/no-vote structure into a single-share class within two years of the deal closing—with Class A shareholders having the option of receiving $24.53 per share or 1.53 Class B shares for each Class A share, according to the letter.
“We think [Class B stockholders] should have a voice in the boardroom starting at the closing,” Bronfman wrote.
Bronfman estimates that his team, which includes film producer Steven Paul; longtime media executive Jon Miller, a partner at Advancit Capital, Shari Redstone’s private-equity firm; and John Martin, the former CEO of Turner, can achieve $3 billion in cost savings.
Last month, Redstone agreed to sell National Amusements to Skydance Media, run by David Ellison, the son of billionaire Oracle co-founder Larry Ellison. Under that deal, Skydance and its investors have agreed to spend more than $8 billion to acquire National Amusements and then merge Skydance into Paramount, creating a new iteration of the iconic business.
Under the terms of that deal, Skydance agreed to buy National Amusements in a transaction with an equity value of $1.75 billion. Skydance and its investors agreed to put $1.5 billion on Paramount’s balance sheet, which it can use to pay down debt.
Skydance is committing another $4.5 billion that Paramount can use for an offer to buy out about 50% of nonvoting shares at $15 each or can roll into the new company. Non-Redstone voting shareholders would be eligible to cash out for $23 a share or roll into the new company as nonvoting shareholders.
Currently, Bronfman’s bid doesn’t offer Class B shareholders the option to cash out at a premium.
Spokespeople for Skydance and for Paramount’s special committee declined to comment.
Bronfman still faces a significant challenge in getting the deal done. Under the terms of Redstone’s deal with Skydance, Skydance has the right to improve the terms of its deal.
Bronfman, who has served as the executive chairman of sports-centric streaming service Fubo since 2020, has discussed bringing in new partners from the technology and other industries for possible strategic partnerships should he take over Paramount, The Wall Street Journal previously reported.
Bronfman separately scored a major victory last week following his company Fubo’s suit against Warner Bros. Discovery, Fox Corp.and Disney for announcing the launch of a joint venture earlier this year. On Friday, a judge blocked the new sports streaming service from debuting, dealing a major blow to the three companies’ efforts.
Part of Bronfman’s pitch is also his experience as a public-company CEO, including at Warner Music Group, a business he oversaw at a time when the music industry was moving from a CD-based business model to digital. Bronfman stepped down as CEO of Warner Music in 2011, after the business was bought by Access Industries, the firm controlled by billionaire Len Blavatnik.
Write to Lauren Thomas at lauren.thomas@wsj.com and Jessica Toonkel at jessica.toonkel@wsj.com