Paramount's stock falls after report Edgar Bronfman Jr. has submitted $4.3 billion offer for Redstone's National Amusements

By Ciara Linnane

Move is latest twist in the battle for control of the media company

Paramount Global's stock fell 2.5% Tuesday, after a report that media executive Edgar Bronfman Jr. has submitted a $4.3 billion offer for National Amusements in an attempt to upend a previous agreement to merge it with David Ellison's Skydance Media.

National Amusements is the vehicle through which Shari Redstone and her family control Paramount (PARA), which owns CBS, cable networks Comedy Central and Nickelodeon, the Parmount+ streaming service and movie studio.

Bronfman is offering to buy National Amusements and acquire a minority stake in Paramount in an equity deal valued at $1.75 billion, which is equal to what Skydance has offered, the Wall Street Journal reported, citing people familiar with the situation.

He has also offered to invest $1.5 billion into Paramount's balance sheet, which is also similar to what Skydance is offering.

The offer includes a $400 million breakup fee that would kick in if Paramount chooses to go with an offer other than Skydance.

Bronfman used to run Warner Music Group Corp. (WMG) and liquor company Seagram Company Ltd., and he has secured financing commitments from high net-worth individuals and family offices, the paper reported. He has also joined forces with movie producer Steven Paul, another figure who has expressed interest in National Amusements.

Skydance - a production company behind some of Tom Cruise's "Mission Impossible" films - is led by David Ellison, the son of Larry Ellison, co- founder and chief technology officer at Oracle Corp. (ORCL)

Last month, Redstone announced a deal to sell National Amusements to Skydance, which agreed to spend more than $8 billion to acquire the company and then merge Skydance and Paramount.

In addition to the $1.75 billion equity value and $1.5 billion for Paramount's balance sheet, Skydance is offering another $4.5 billion that Paramount can use to buy out about 50% of nonvoting shares at $15 each or can roll into the new company. Non-Redstone voting shareholders would be entitled to $23 a share, or can roll into the new company.

The Skydance deal was subject to a "go-shop period," which ended on Wednesday. A Bronfman was expected as the executive has discussed bringing in other partners from industries such as technology should he gain control of Paramount, as the Wall Street Journal has previously reported.

The next step is for a special committee of directors at Paramount to decide if Bronfman's bid "is or would reasonably be expected to lead to a superior proposal," relative to Skydance's offer, and thus warrants extending the go-shop period for another two weeks, according to the Skydance deal terms.

Skydance also has the right to sweeten its offer. The company declined to comment to the WSJ.

Bronfman is also executive chairman of streaming service fuboTV Inc. (FUBO), which saw its stock rocket 30% on Monday, after Venu Sports, a streaming service from the Walt Disney Co. (DIS), Warner Bros. Discovery Inc. (WBD) and Fox Corp. (FOXA), was blocked by a judge from launching just a week before it was set to debut. (Fox shares common ownership with MarketWatch publisher Dow Jones's parent, News Corp.)

The three companies are attempting to "exercise near-monopolistic control over the ability for a different live-sports-only streaming service to exist and compete," U.S. District Judge Margaret Garnett ruled Friday.

For more, read: Fubo stock spikes 30% after judge blocks Disney-Fox-WBD sports streaming bundle due to 'near-monopolistic' concerns

The battle for Paramount has been going on for months. Skydance was apparently close to sealing a deal in June, but talks broke off at the last minute, only to be revived weeks later.

Paramount and other media companies have cut costs, laid off staff and sought to combine as they try to find a path to profitability for their streaming services and compete with Netflix Inc. (NFLX), which some analysts have already declared the winner of the streaming wars. Studios have pulled back on TV production in the wake of last year's strikes.

Other bidders that emerged during the talks included Sony and private-equity firm Apollo Global Management Inc. (APO); Barry Diller and his media company IAC Inc. (IAC), as well as Bronfman.

In January, media mogul Byron Allen was reported to have made an offer.

Paramount's stock has fallen 27% in the year to date, underperforming the S&P 500 SPX, which has gained 17.6%.

-Ciara Linnane

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08-20-24 0939ET

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