Edgar Bronfman, Jr.
Cameron Costa |
Edgar Bronfman Jr.’s offer for a majority stake in Outstanding Global could tie Shari Redstone to the company if his offer is successful.
Bronfman is willing to keep Redstone, currently Paramount's non-executive chairman, at the company if Paramount's special committee accepts his consortium's offer for majority shareholder National Amusements, a person familiar with the matter said.
Bronfman has raised $6 billion to challenge Skydance Media's ownership of National Amusements, the holding company founded by Sumner Redstone, people familiar with the matter said. Both Bronfman's and Skydance's offers would also include money to buy out a portion of Paramount Global's common stock.
Bronfman's offer, at a price of $6 billion, would give about 20 percent of Class B holders at $16 per share. Skydance would pay out about 50 percent of Paramount's current common stockholders at $15 per share as part of its offer, people familiar with the offer said.
It is not clear whether Redstone prefers one offer over the other. Paramount Global's special committee will decide by August 28 whether Bronfman's offer is a better deal for shareholders. If the committee decides Bronfman's offer is better, Skydance will have four business days to match it. The entire process must be completed by September 5.
Bronfman has a few days left to raise more money for a rival bid against Skydance, which last month agreed to an $8 billion deal to merge with Paramount Global. The special committee earlier this week extended the so-called “go-shop” period – during which competing offers can be considered – by 15 days to consider Bronfman's original offer.
One of the people involved in Bronfman's bid is former AOL CEO Jon Miller, suggesting Redstone could potentially have more control over a future Paramount Global than she would get at Skydance. Miller, a close Redstone ally, has connected Bronfman with potential capital and would likely take a role in the company if it came under Bronfman's leadership — possibly a board seat and an operating job — people familiar with the matter say. Bronfman would be CEO of the company if his deal is accepted and followed through, the people said.
Miller, Redstone and Redstone's son-in-law Jason Ostheimer co-run Advancit Capital, a small venture capital firm that invests in media and technology. The trio are the only people listed on the firm's website. Miller also served as a hands-on strategic adviser to Redstone for many years, according to people familiar with the matter.
Redstone has not spoken to Miller about the offer, according to people familiar with the matter.
Although the Redstone family and the Bronfman family moved in similar circles and donated generously to Jewish foundations, among other things, Edgar Bronfman Jr. and Shari Redstone did not meet often and there is no close relationship between them, two of the people said.
Skydance CEO David Ellison and Redstone have had several discussions about the possibility of Redstone remaining with the company as a shareholder in a combined company between Skydance and Paramount Global, according to people familiar with the matter.
According to a person familiar with her thinking, Redstone is taking a wait-and-see approach to any future involvement with Paramount Global, regardless of the company's ownership.
Spokespeople for Redstone, Bronfman, the Paramount Global special committee and Skydance all declined to comment.
Last minute bid
Bronfman has in recent weeks rallied many people interested in a stake in Paramount Global, including film producer Steven Paul and Patron co-founder John Paul DeJoria, who had previously considered a bid of their own, according to a person familiar with the matter. Others include Fortress Investment Group, the lending arm of private equity firm BC Partners, and John Martin, the former CEO of Turner Broadcasting.
Bronfman's funding comes from many different sources, potentially raising regulatory concerns if too much money comes from foreign entities. The many different backers could also make Bronfman's bid riskier than Skydance's bid, which is backed by private equity firm RedBird Capital and multi-billionaire Larry Ellison, father of David Ellison.
Bronfman is chairman of Fubo, a sports streaming service, and the former head of Universal and Warner Music.
Skydance's lawyers have sent a letter to Paramount Global's special committee urging the company to stop negotiations with Bronfman, the Wall Street Journal reported Thursday. Skydance said Paramount Global violated the terms of the Go-Shop agreement by not informing Skydance of the planned window extension, the report said.
Skydance also argued that the special committee did not have the right to extend the deadline because an offer “could reasonably be expected to result in a better offer.” Skydance argued that Bronfman's offer did not meet those criteria.
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