Paramount-Skydance: “Go-Shop” period extended to review Bronfman offer

The future of Outstanding Global is still uncertain.

Paramount’s special committee announced Wednesday that it would extend the agreed-upon “go-shop” period of the merger agreement with Skydance by 15 days while it reviews a competing offer from Edgar Bronfman Jr.

Bronfman had originally offered $4.3 billion for Shari Redstone’s National Amusements, Paramount’s majority shareholder, according to a person familiar with the offer. But after making the bid late Monday, Bronfman raised additional funds to support a higher offer, said the person, who asked not to be identified to discuss the details of the offer.

The offer is intended to replace Paramount’s merger agreement with Skydance Media, which was reached in early July and concluded a months-long negotiation process. The agreement included a 45-day “go-shop” period during which Paramount could solicit additional offers.

The special committee confirmed on Wednesday “receipt of a takeover proposal from Edgar Bronfman Jr. on behalf of a consortium of investors.”

“As a result, the ‘go-shop’ period for the Bronfman Consortium under the transaction agreement, to which the Company remains subject, is extended to September 5, 2024,” the committee said in a statement. “There is no assurance that this process will result in a superior offer. The Company does not intend to disclose any further developments unless and until it determines that such disclosure is appropriate or otherwise required.”

The committee added that it had contacted more than 50 third parties during the initial “go-shop” phase to gauge potential takeover interest. For all other parties, the go-shop phase will expire before midnight on Wednesday, the committee said.

The Skydance buyer consortium, which also includes private equity firms RedBird Capital Partners and KKR, has agreed to invest more than $8 billion in Paramount and acquire National Amusements. The deal gives National Amusements an enterprise value of $2.4 billion, including $1.75 billion in equity.

Under the Skydance deal, Paramount’s Class A shareholders would each receive $23 in cash or stock, and Class B shareholders would receive $15 per share. That would give public shareholders a total of $4.5 billion in cash. Skydance also agreed to inject $1.5 billion into Paramount’s balance sheet.

National Amusements owns 77% of Paramount’s Class A shares and 5% of its Class B shares. If the Skydance transaction were completed, National Amusements would own all of Paramount’s Class A shares and 69% of its Class B shares outstanding.

Bronfman’s initial offer called for a $1.75 billion purchase of National Amusements. The offer, like the Skydance deal, included a $1.5 billion investment in Paramount’s balance sheet and also included assuming the $400 million severance payment Paramount would owe Skydance if the company backed out of the deal, according to the person familiar with the deal.

Bronfman previously ran Warner Music and spirits manufacturer Seagram and was also chairman of Fubo TV since 2020. Details of his application were first published by the Wall Street Journal.

The merger agreement between Paramount and Skydance has caught the attention of shareholders. Asset manager Mario Gabelli has reportedly filed a lawsuit demanding that Paramount release its books related to the Skydance deal – a possible first step to a lawsuit challenging the deal. Investor Scott Baker has reportedly filed suit to block the deal, arguing it would cost shareholders $1.65 billion.