Edgar Bronfman Jr. has dropped the curtain on a last-minute bid to buy Paramount Global.
Paramount Global, struggling under debt and pressure debt and shrinking profits from its cable television networks, had agreed to an $8 billion offer from Skydance Media led by David Ellison, son of billionaire Oracle founder Larry Ellison.
Skydance’s agreement with Paramount included a 45-day go-shop provision that enabled the Paramount board to consider superior bids for the company.
Bronfman emerged with a $4 billion bid that was sweetened to $6 billion. But just before the board’s deadline, Bronfman, who has used the proceeds from his family’s sale of Seagram to dabble in media, pulled out.
“Tonight, our bidding group informed the special committee that we will be exiting the go-shop process,” Bronfman said in a statement. “It was a privilege to have the opportunity to participate. We continue to believe that Paramount Global is an extraordinary company, with an unrivaled collection of marquee brands, assets and people.”
The withdrawal appears to clear the way for Skydance to consummate its acquisition of Paramount.
"Having thoroughly explored actionable opportunities for Paramount over nearly eight months, our Special Committee continues to believe that the transaction we have agreed with Skydance delivers immediate value and the potential for continued participation in value creation in a rapidly evolving industry landscape," Charles E. Phillips Jr., the chair of the special committed of independent directors charged with reviewing the offers.
Skydance had reportedly objected to the committee’s plan to extend the go-shop period to review Bronfman’s offer because Bronfman’s offer was not superior to the one made by Skydance.
Both offers included provisions for paying off Shari Redstone, the daughter of media mogul Sumner Redstone who assembled Paramount. Ellison will pay $2.4 billion to acquire Nataional Amusements, the Redstone family holding company which owns 80% of the voting stock in Paramount.
Other holders of Paramount voting and non-voting stock have raised questions about the Skydance bid because it appears to favor Redstone above other shareholders.
Paramount reported a $5.4 billion loss in the second quarter that included a $6 billion writedown against the value of its portfolio of cable networks including MTV, Comedy Central and Nickelodeon. Another struggling media company, Warner Bros. Discovery, took a $9 billion charge against the value of its linear networks as well.)
Cable networks have seen revenues decline as cord-cutting has reduced distribution and advertising revenue. Paramount reduced the losses at its streaming businesses to $26 million from $424 million in the second quarter of 2023.
Paramount’s current management announced that it aims to reduce costs by $500 million annually mainly by cutting its U.S.-based workforce by 15%.
For Skydance, closing the acquisition of Paramount is expected to take about a year because of clearing regulatory issues related to Paramount’s ownership of CBS and its local television station group.
