Edgar Bronfman Jr. Submits Bid for Paramount
Edgar Bronfman Jr. Submits Bid for Paramount - The New York Times
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Paramount Draws a New Bid, Complicating Deal With Skydance
The offer by Edgar Bronfman Jr. comes days before a crucial deadline in the scramble to acquire control of Paramount.
Edgar Bronfman Jr., the former chief executive of Warner Music Group and the heir to the Seagram fortune, submitted a bid on Monday to gain control of Paramount, the media conglomerate that owns CBS, MTV and the movie studio behind such hits as “The Godfather” and “Mission: Impossible,” according to two people familiar with the offer who were not authorized to speak publicly.
The bid is the latest twist in a monthslong saga over control of Paramount, a once-mighty TV and film colossus. In July Skydance, the Hollywood studio founded by the technology scion David Ellison, agreed to buy out Shari Redstone, Paramount’s controlling shareholder, and other shareholders and recapitalize the company. But the deal, in which Skydance and its backers would put up roughly $8 billion, had a 45-day “go-shop” provision that allowed Paramount to seek a better offer.
Mr. Bronfman is taking advantage of that window. He is part of a bidding group that includes the producer Steven Paul, creator of the “Baby Geniuses” movie franchise, according to two people familiar with the matter.
The fate of Mr. Bronfman’s bid should be clearer on Wednesday, when that “go-shop” window expires. A decision by Paramount to extend the time it has to negotiate a deal would signal that the company is taking his offer seriously.
According to one of the sources, Mr. Bronfman has offered $4.3 billion for control of Paramount, a company that was worth roughly $25 billion when it was created by the merger of Viacom and CBS five years ago. The proposal would give Mr. Bronfman ownership of National Amusements, the parent company of Paramount, allowing him to control the media conglomerate.
News of the bid was reported earlier by The Wall Street Journal.
A longtime media executive, Mr. Bronfman is said to be interested in running Paramount as its chief executive if his bid prevails. In recent weeks, he has met with Ms. Redstone to discuss his bid, according to two people with knowledge of the meetings.
Paramount has struggled over the past decade as the cable television business has waned and Hollywood has been disrupted by streaming. Paramount is betting that cash from its streaming businesses, Paramount+ and Pluto TV, will eventually replace profits from cable, but so far investors haven’t bought in, and the company’s stock has suffered. The company said this month that its streaming business had turned a profit and that it was laying off 15 percent of its U.S. work force.
Though Paramount’s cable business is a shadow of its former self, the company’s movie studio and its library of films and TV shows still hold enormous cultural cachet.
Selling to Mr. Bronfman or Mr. Ellison would bring an end to the Redstone family media dynasty. It would mean parting with a company built by Sumner Redstone, the World War II codebreaker-turned-lawyer who acquired Paramount Pictures, Viacom and CBS through a series of audacious deals, beginning in the late 1980s. Ultimately, the fate of the company will be decided by Shari Redstone, Mr. Redstone’s daughter; and her family.
The Skydance deal calls for a merger of Skydance and Paramount, which has been met with some resistance from Paramount shareholders who feel shortchanged. Many say that Skydance’s valuation in the merger, $4.75 billion, is too high relative to the value of Paramount, essentially allowing Mr. Ellison to take over the company at a discount.
But Mr. Bronfman’s bid faces an uphill battle. He has an extremely well-capitalized adversary in Mr. Ellison, whose father, Larry Ellison, founded the software giant Oracle and is backing Skydance’s bid. David Ellison has also guaranteed Ms. Redstone an additional payout in exchange for her voting clout — what’s known as a control premium — giving her an incentive to stick with the existing deal. And, Paramount has agreed to pay a $400 million “breakup fee" to Skydance if the deal doesn’t close, giving the company another reason to consummate the deal.
Still, Mr. Bronfman has several factors working in his favor. He is friendly with Ms. Redstone and her family, according to people familiar with the matter, giving him a toehold to build support for his bid. He also has experience running a major public company, something that Mr. Ellison lacks.
Jeff Shell, who is expected to become Paramount’s president under Mr. Ellison, has run NBCUniversal, a major division of Comcast, and Gemstar–TV Guide International, a small public company that was sold in 2008.
Mr. Bronfman’s bid puts Paramount in a tricky spot. If the company’s special committee — a group of directors charged with evaluating potential deals — doesn’t take his bid seriously, it could risk alienating investors who are disenchanted with Mr. Ellison and Skydance. But pursuing the deal could mean losing Skydance and Mr. Ellison, a deep-pocketed suitor who has committed to investing in Paramount for the long haul.
Benjamin Mullin reports on the major companies behind news and entertainment. Contact Ben securely on Signal at +1 530-961-3223 or email at benjamin.mullin@nytimes.com. More about Benjamin Mullin
Lauren Hirsch covers Wall Street, including M&A, executive changes, board strife and policy moves affecting business. More about Lauren Hirsch
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