Paramount Global’ President Shari Redstone received a new offer as negotiations with David Ellison’s Skydance Media continue.
The Paramount saga continues as another bidder comes to the court of Shari Redstone with a multi-billion dollar offer. Edgar Bronfman Jr., former CEO of Warner Bros Music and current executive chairman of Fubo, is the new guest at Paramount Global’s grand ball.
Bronfman reportedly offered $3 billion in cash for Shari Redstone’s stake in Paramount Global. Redstone’s firm National Amusements International controls 77% of Paramount’s voting shares and is therefore the most important decision-maker in the entertainment giant.
Paramount Global has been enveloped in deal negotiations for months. The biggest offer to date was by Sony Entertainment: a $26 billion merger proposal backed by international equity firm Apollo. A Sony-Paramount merger would have wreaked havoc in the entire industry, not to mention the significant regulatory hurdles it would have created.
Paramount-owned CBS, for example, could not have been sold to Sony because no foreign firm can own a nationwide broadcasting network.
Class-B voters liked Sony’s proposal as it included a pick-up of Paramount’s $15 billion in long-term debt. Negotiations, however, eventually failed and Sony has since withdrawn its offer.
Ellison vs. Bronfman
The most promising offer currently on the table comes from Skydance Media’s CEO David Ellison. The $8.5 billion proposal is backed by David’s father and Oracle CEO Larry Ellison, as well as RedBird Capital.
The proposed deal involves a $2 billion purchase of Redstone’s stake, followed by a $5 billion acquisition of Skydance by Paramount. In the end, David Ellison would own 50% of the merged Paramount-Skydance new conglomerate. It will also likely entail a completely different power structure.
Paramount’s Class-B shareholders, who don’t hold any voting rights, threatened to sue if Skydance’s original proposal came to pass.
In an effort to sweeten the deal for Class-B shareholders, David Ellison added a $3.5 billion compensation package for them. Under the new proposal, Class-B shareholders could cash out for $15 per share, up from the current stock value of $12.28.
Sources close to the matter told Deadline and Variety that Class-B shareholders are still unhappy about the deal, and would likely sue anyway. It’s unclear who between Paramount Global and Skydance would take on the legal expenses to face this lawsuit.
According to the same sources, Class-B shareholders would sue even if Redstone accepted Bronfman’s $3 billion offer.
Shari Redstone has no deadline or obligation toward shareholders to decide. She could pick any offer she wanted at any time. However, the future of Hollywood and the global entertainment industry is at stake: the Paramount saga will not end any time soon.
