Edgar Bronfman, Jr.
Cameron Costa | CNBC
Edgar Bronfman Jr. walked away from his bid for Paramount after the company’s special committee demanded his consortium submit a final offer Monday, according to people familiar with the matter.
Initially, Bronfman thought he would have until end of day Tuesday to round up financing, but the deadline moved up a day to give the special committee and its financial adviser Centerview Partners enough time to perform due diligence on the bid, said the people, who asked not to be named because the discussions were private. The special committee had until Wednesday this week to make a determination if Bronfman’s bid was superior to an existing merger agreement with David Ellison’s Skydance Media. Had it done so, Skydance would have had four business days to match the offer.
The development brought to an abrupt end a monthslong deal-making process for Paramount that saw several twists and turns.
Bronfman dropped his 11th hour bid just a week after the media executive made an initial offer of $4.3 billion for Shari Redstone’s National Amusements, the controlling shareholder of Paramount. Part of the offer included taking a minority stake in Paramount.
Bronfman’s consortium of bidders included institutions, such as Fortress Investment Group and the credit arm of BC Partners, and a cadre of high-net-worth individuals. Bronfman said last week in a letter to the Paramount special committee that he had rounded up 19 financial backers, as first reported by The Wall Street Journal.
Some of those prospective investors dropped out in recent days fearing that specific private details around their financing would become public through potential press leaks, according to two people familiar with the matter, who asked not to be named because the details are private. Skydance had access to the details of Bronfman’s bid due to legal rules as part of the go-shop period, and some bidders feared the Skydance team would be motivated to leak information to the press, the people said. Others walked away due to the tight timeframe given to provide financial information, the people said.
Bronfman had planned to boost his bid to about $6 billion, but the amount raised as of Monday was closer to $5 billion after some potential investors had dropped out, the people said. Bronfman decided to pull his offer after it was clear his consortium wouldn’t be able to provide documentation to Paramount’s special committee in time for it to be properly vetted, the people said.
Spokespeople for Bronfman, Skydance and the Paramount special committee declined to comment.
Bronfman’s bid would have matched Skydance’s offer in paying $23 a share to Class A holders, one of the people said. It would have also given cash to some Class B shareholders at $16 a share, though the amount raised for common shareholders was billions less than Skydance’s offer, which pays out about 50% of current Paramount common shareholders at $15 per share, equating to a cash consideration totaling $4.5 billion available to public shareholders.
Skydance’s offer — backed by private equity firm RedBird Capital Partners — also includes an injection of $1.5 billion into Paramount’s balance sheet.
With Bronfman out of the picture, the path is cleared for Skydance to merge with Paramount. The special committee said late Monday the go-shop period was now over.
The deal is expected to close in the first half of 2025, pending regulatory approval.
Paramount shares were down more than 6% in afternoon trading Tuesday.
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