Edgar Bronfman, Jr.
Cameron Costa | CNBC
Edgar Bronfman Jr.’s bid for a controlling stake in Paramount Global could keep Shari Redstone close to the company, if its bid is successful.
Bronfman is open to the idea of Redstone, currently Paramount’s nonexecutive chairman, remaining involved in the company if Paramount’s special committee accepts his consortium’s offer for National Amusements, the majority shareholder, according to a person familiar with the matter.
Bronfman has raised $6 billion to compete with Skydance Media for ownership of National Amusements, the holding company founded by Sumner Redstone, according to people familiar with the matter. Bronfman’s offer and Skydance’s offer also reportedly include money to buy out a percentage of Paramount Global’s common stock.
Bronfman’s $6 billion offer would pay cash to about 20% of Class B shareholders at $16 per share. Skydance would pay about 50% of Paramount’s current common shareholders at $15 per share in its offer, according to people familiar with the matter.
It is unclear whether Redstone prefers one offer over the other. Paramount Global’s special committee will determine whether Bronfman’s offer is a superior proposition for shareholders by August 28. If the committee decides Bronfman’s offer is superior, Skydance will then have four business days to match. The deadline for the entire process to be concluded is September 5.
Bronfman still has a few days to raise additional funds for a rival bid to counter Skydance, which last month agreed to an $8 billion merger deal with Paramount Global. The special committee this week extended the so-called “go-shop” period — during which it could consider competing offers — by 15 days to consider Bronfman’s initial offer.
One of the individuals included in Bronfman’s bid is former AOL CEO Jon Miller, suggesting that Redstone could potentially have more control over a future Paramount Global than she would have with Skydance. Miller, a close ally of Redstone, has connected Bronfman with potential capital and would likely accept a role in the company if it were to come under Bronfman’s leadership — perhaps a board seat and an operating role — according to people familiar with the matter. Bronfman would be CEO of the company if her deal were accepted and closed, the people said.
Miller, Redstone and Redstone’s son-in-law, Jason Ostheimer, together run Advancit Capital, a small venture capital firm that invests in media and technology. The trio is the only one listed on the firm’s website. Miller also served as Redstone’s de facto strategic adviser for many years, according to people familiar with the matter.
According to people familiar with the matter, Redstone has not spoken with Miller about the offer.
Although the Redstone family and the Bronfman family moved in similar circles, including making significant donations to Jewish foundations, Edgar Bronfman Jr. and Shari Redstone did not meet often and did not have a close preexisting relationship, two of the people interviewed said.
Skydance CEO David Ellison and Redstone have had several discussions about the possibility of Redstone remaining a shareholder in a combined Skydance-Paramount Global company, 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 she might want to have in Paramount Global, regardless of its ownership.
Spokespeople for Redstone, Bronfman, the Paramount Global special committee and Skydance all declined to comment.
11th Hour Offer
Bronfman has spent the past few weeks rounding up people interested in buying 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 process, as well as Fortress Investment Group, the credit arm of private equity firm BC Partners, and former Turner Broadcasting CEO John Martin.
Bronfman’s funding comes from a wide variety of sources, which could potentially raise regulatory concerns if too much of the money comes from foreign entities. Having so many different financiers could also make Bronfman’s bid riskier than Skydance’s, which is backed by private equity firm RedBird Capital and billionaire Larry Ellison, David Ellison’s father.
Bronfman is the president of Fubo, a sports streaming service and former head of Universal and Warner Music.
Skydance’s lawyers sent a letter to Paramount Global’s special committee demanding that the company stop negotiating with Bronfman, The Wall Street Journal reported Thursday. Skydance said Paramount Global violated the terms of the go-shop agreement by failing to notify it of its intention to extend the negotiation period, the report said.
Skydance also argued that the special committee had no authority to extend the consultation period because an offer would “reasonably lead to a superior proposal.” Skydance argued that Bronfman’s offer did not meet the criteria.
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