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Edgar Bronfman Jr. Bows Out of Paramount Bidding War, Spotlight Shifts to Skydance's $47.5 Billion Offer

AInvestMonday, Aug 26, 2024 9:00 pm ET
1min read
Edgar Bronfman Jr., a seasoned media executive and Seagram Co. heir, has formally withdrawn from the bidding process to acquire Paramount Global (PARA.US). Paramount, which had previously extended the bidding period to consider Bronfman's offer, now finds itself with fewer suitors as the race to acquire the media conglomerate heats up.
Sources indicated that Bronfman had proposed a $60 billion acquisition, which included investing $17 billion into non-Redstone-held Class B shares at $16 per share, and $15 billion into newly issued Paramount shares to help reduce the company's debt. Additionally, Bronfman intended to pay $24 billion to the Redstone family, which holds significant voting stock through their National Amusements Inc.
Paramount's board and special committee had been weighing Bronfman’s offer against a prior $47.5 billion deal with David Ellison's Skydance Media. The Skydance bid also included a $15 per share purchase of nearly 50% of non-Redstone-held Class B shares and proposed merging Skydance with Paramount, diluting the stakes of existing shareholders, particularly those without voting rights.
Bronfman's departure narrows the field for Paramount, which had already extended the bidding period to September 5 from the initial deadline of August 21 to accommodate his offer. This extension followed intense scrutiny of Paramount's financials and competitive bid discussions with other potential investors.
Interestingly, the bid extension period, referred to as the "Go-Shop Period," allowed Paramount to seek out better offers. Paramount's stock had a slight uptick, closing at $11.07 a share, reflecting the market's cautious optimism. Remaining competitors and the Skydance bid still hold the spotlight as the September deadline approaches.
Bronfman's advanced evaluation had involved talks with Bain Capital and potential interests from other entities like Roku Inc., though neither have committed to binding bids. Meanwhile, Skydance's intricate offer, promising a merger and share reacquisition, highlights the potential upheaval for Paramount's ownership structure.
This consolidation marks a significant shift in the media landscape, with Paramount striving to navigate the competitive bidding environment, enhancing its strategic positioning amid evolving viewer preferences transitioning from traditional to streaming media.
Edgar Bronfman Jr.'s withdrawal from the acquisition attempt underscores the complex and high-stakes world of media mergers and acquisitions. As the deadline looms, all eyes will be on whether Paramount secures a bid that balances both strategic growth and shareholder value.
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