Billionaire Scions Bronfman, Ellison, and Redstone Locked in Paramount Takeover Saga

In a dramatic twist to the ongoing battle for control of Paramount Global, former Seagram and Warner Music executive Edgar Bronfman Jr. has emerged as a major player. Bronfman submitted a late bid to acquire the media conglomerate, which owns CBS, MTV, Comedy Central, and the Paramount film studio, valuing his offer at approximately $4.3 billion.

A New Contender

Bronfman’s move comes just a month after Shari Redstone and the Paramount board approved a bid from tech entrepreneur David Ellison’s Skydance Media. Ellison’s proposal, valued at $8.4 billion, involves a multifaceted transaction that includes a $1.5 billion cash infusion from Skydance and its financial partners, RedBird Capital Partners and private equity firm KKR. This deal aims to alleviate Paramount's debt and acquire shares from Class B shareholders eager to exit.

Bronfman, leading an investor group that includes media veterans Jon Miller, Steven Paul, and John Martin, has thrown a wrench into the proceedings with his bid. In a letter to Paramount’s lead independent director, Charles Phillips, Bronfman expressed confidence in the Paramount business’s potential, suggesting that his proposal could be more beneficial for the company’s future.

The Skydance Proposal

Ellison’s deal includes significant financial backing to help Paramount address its debt and restructure its operations. The proposed merger values Skydance at $4.75 billion and plans to inject $1.5 billion into Paramount. Skydance’s deal also proposes buying out non-Redstone Class A shareholders at $23 a share, with investors having the option to maintain their shares in the newly merged entity.

However, some shareholders have criticized Ellison’s bid, alleging that it inflates the value of Skydance, which has co-produced several of Paramount’s blockbuster hits, including "Top Gun: Maverick."

Bronfman’s Counteroffer

Bronfman’s bid challenges the Skydance proposal by arguing that Paramount’s value might be better realized as a standalone entity rather than through a merger. His offer also addresses some concerns related to the Skydance deal, including the potential risks and costs associated with combining the two companies.

Bronfman’s group plans to pay $24.53 per share to non-Redstone A-Class shareholders, surpassing the amount proposed in the Skydance deal. B-Class shareholders would be offered $16 per share. Paramount shares, trading at $10.86, have seen a slight decline recently.

The Road Ahead

As the window for accepting alternative bids closes in two days, Paramount’s special board committee, led by Phillips, faces a critical decision. The company’s recent troubles, including significant layoffs and a credit downgrade, have heightened the stakes of this high-profile auction. Paramount has agreed to a $400 million breakup fee with Skydance if the deal falls through, a cost that Bronfman’s bid reportedly covers.

Looking Forward

With both proposals on the table, the future of Paramount Global hangs in the balance. The outcome of this high-stakes bidding war will shape the company’s direction and its place in the rapidly evolving media landscape.

Stay tuned for updates on this unfolding saga as Paramount’s board weighs its options and decides the next chapter for one of Hollywood’s storied entertainment giants.