Edgar Bronfman Jr. Challenges Skydance-Paramount Merger With $4.3B Bid
By Anna Staropoli August 20, 2024 5:33 pm
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The future of Paramount Global is suddenly far from settled, with businessman and former Warner Music Group CEO Edgar Bronfman Jr. now in the mix.
On Monday, Bronfman bid roughly $4.3 billion to buy National Amusements, Paramount’s majority stakeholder. Bronfman is expected to up that offer to $5.5 billion, thanks to additional, rumored investments, reports The Financial Times.
“We believe there is significant upside in the Paramount business and in the value of Paramount’s shares,” Bronfman wrote in a letter to a Paramount director, per the L.A. Times
His bid throws a last-minute wrench in Paramount’s plans with Skydance Media. In July, Shari Redstone — president of National Amusements, whose family has long run Paramount — approved an $8.4 billion merger with David Ellison’s Skydance. Paramount — a major driver of studio and other creative commercial real estate in the L.A. area — has just two days left in its 45-day window to consider bids other than Skydance’s.
This week’s news follows other recent changes to slash Paramount’s costs and combat the company’s financial woes. Last week, Paramount announced the start of layoffs to eliminate some 2,000 jobs, as well as the shuttering of L.A.’s Paramount Television Studios.
If accepted, the Ellison deal would include a $1.5 billion cash infusion from Skydance and the company’s financial partners to address Paramount’s debt, per the Times. The deal likewise accounts for a $4.5 billion share buyout so the media company’s Class B shareholders have the chance to opt out.
That deal, however, is not without its controversy. Some shareholders have pushed back against the merger, arguing that it inflates the value of Skydance, the smaller of the two businesses.
“Our proposal eliminates the risks, uncertainties and costs of combining Paramount with Skydance,” Bronfman said in the statement viewed by the L.A. Times. “We believe Paramount is most valuable as a standalone business.”
Should Paramount renege on Ellison’s offer, the media company would have to pay Skydance $400 million — a sum Bronfman’s offer would cover, according to the Wall Street Journal.
Regardless of the outcome, it’s been a busy month for both Paramount and the Ellison family. Larry Ellison, father of Skydance’s David, recently completed a $277 million deal for a Palm Beach, Fla., oceanfront hotel. The transaction ranks as one of South Florida’s largest hospitality sales in 2024.
A spokesperson for Paramount did not immediately respond to a request for comment.
Anna Staropoli can be reached at astaropoli@commercialobserver.com.
