Paramount Global’s path forward is clouded by uncertainty as its special committee announced a 15-day extension to the “go shop” period of its merger agreement with Skydance Media. This extension, effective until September 5, 2024, comes in response to a competing bid from Edgar Bronfman Jr., who initially proposed a $4.3 billion offer for Shari Redstone’s National Amusements, Paramount’s controlling shareholder.
Bronfman’s initial proposal included acquiring a minority stake in Paramount alongside purchasing National Amusements. Following the initial bid, Bronfman increased his offer to $6 billion, aiming to surpass the existing merger agreement with Skydance, which was finalized in early July. This agreement had been the culmination of extensive negotiations and included a 45-day period for Paramount to explore alternative offers.
The special committee confirmed receipt of Bronfman’s revised proposal from a consortium of investors, noting that there is no guarantee this process will yield a superior proposal. The committee emphasized that further disclosures would only be made if deemed necessary or legally required.
During the original “go shop” period, the committee reached out to over 50 potential parties to assess acquisition interest. The Sky dance deal, which also involves private equity firms RedBird Capital Partners and KKR, proposes an investment exceeding $8 billion into Paramount, along with acquiring National Amusements. Under this agreement, Paramount’s Class A shareholders would receive $23 per share, while Class B shareholders would receive $15 per share. Additionally, Skydance has committed $1.5 billion in capital to Paramount’s balance sheet.
Bronfman’s enhanced bid includes $1.7 billion allocated for a tender offer, potentially allowing non-voting shareholders to receive $16 per share. The bid also covers the $400 million breakup fee Paramount would owe Skydance if the deal were to be abandoned.
The Skydance merger has faced scrutiny from shareholders, with lawsuits challenging the deal’s terms and potential impact on shareholder value.
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