Paramount Global Hit with $4.3 Billion Counter Offer from Edgar Bronfman and Partners

The current bid is the latest twist in a months-long quest to sell Paramount

Veteran media executive Edgar Bronfman Jr. filed a $4.3 billion proposal on Monday to acquire Paramount Global through the acquisition of National Amusements, which owns a controlling stake in Paramount, according to sources familiar with the situation.

The rival offer for the home of Paramount Pictures, the CBS broadcast network, and MTV is a new twist in a sale process that has taken several unexpected turns. It threatens to derail a planned acquisition by computer magnate David Ellison and his company, Skydance Media.

A Bronfman-led investment consortium of 19 organizations offered National Amusements $2.4 billion in debt and stock, mirroring the conditions of Skydance’s purchase agreement.

The group also promised $1.5 billion to Paramount‘s financial sheet, which will help the corporation pay down debt and improve its credit rating. In exchange for their investment, the investor group would get Class B shares as equity at a price of $16 per share.

Bronfman is offering Paramount’s Class A stockholders (excluding the Redstone family) a choice of $24.53 a share in cash, a 7% premium over the Skydance deal, or the option to exchange their shares for 1.5 Class B Paramount shares.

The organization did not make an offer to buy the company’s non-voting shares. This differs significantly from Paramount’s arrangement with Skydance, which has committed $4.3 billion to purchase Class B shares for $15 per share of stock.

The investing group comprises bitcoin pioneer Brock Pierce and Jeff Ubben, the founder and managing partner of Inclusive Capital Partners. Another supporter is Fortress Investment Group, whose majority shareholder is Mubadala Capital, a subsidiary of an Abu Dhabi-based sovereign investor. However, Fortress operates independently of Mubadala and makes its own investment decisions, according to a person familiar with its operations.

The letter states that all 19 backers identified, including Bronfman, are ready to contribute to the financing awaiting “if applicable, final approval of their respective investment committee or governing body.”

The current bid is the latest twist in a months-long quest to sell Paramount, which includes CBS, cable networks Comedy Central and Nickelodeon, the Paramount streaming service, and its own movie studio.

Bronfman has proposed buying National Amusements in an equity deal worth $1.75 billion, which is equivalent to what Skydance has paid for Redstone’s company, as well as putting $1.5 billion on Paramount’s balance sheet, which is also comparable to what Skydance has offered, according to the people. Bronfman’s offer for National Amusements includes debt and totals $2.4 billion.

According to a source familiar with the deal, the Bronfman-led consortium would pay the $400 million breakup fee.

The Bronfman group expects to attain a 5% annual revenue growth rate by investing in the company’s creative portfolio and creating content for both its own channels and competitors. It committed to increasing efficiency by outsourcing technology for the streaming business, collaborating with other services, and using technology such as A.

Another source familiar with Bronfman’s reasoning told Reuters that he believes his offer is preferable since it eliminates the risks and costs associated with integrating Paramount and Skydance. Paramount had previously agreed to buy Skydance in an all-stock transaction valued at $4.75 billion, according to the firms’ statements.

Representatives from Paramount’s board and Skydance declined to comment. According to two sources familiar with the case, Bronfman considered buying National Amusements before Paramount reached an agreement with Skydance, but did not make an offer.

People familiar with the case told Reuters that Bronfman was advised on the transaction by UBS Investment Bank, Perella Weinberg Partners, and Rockefeller Capital Management. Jonathan Miller, a media veteran and advisor to Shari Redstone’s Advancit Capital, assisted Bronfman in the transaction.

Last month, Redstone sold National Amusements to Skydance Media, led by David Ellison, son of billionaire Oracle co-founder Larry Ellison. Skydance and its backers agreed to spend more than $8 billion to acquire National Amusements, which would then be merged into Paramount, resulting in a new edition of the legendary corporation.