PRODUCER David Ellison’s Skydance Media is set to become the new owner of Paramount Global after Seagram heir Edgar Bronfman Jr dropped out, ending one of the industry’s most dramatic acquisition contests.
The storied Hollywood studio said it expects to complete the deal with Skydance in the first half of 2025 as it confirmed Bronfman’s retreat late Monday (Aug 26). It also ended its “go-shop” period that allowed it to look for other bidders.
Ellison, the son of Oracle co-founder Larry Ellison, is aiming to provide a fresh start to beleaguered Paramount, the parent of CBS and MTV. Laden with more than US$14 billion in debt, the iconic Hollywood company has struggled to compete in streaming and has suffered as cable TV audiences cancelled their subscriptions and abandoned traditional channels such as CBS and Nickelodeon. It’s reducing its US workforce by 15 per cent and shut down Paramount Television Studios this month.
“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,” said Charles E Phillips, Jr, the chair of a Paramount board special committee.
Earlier on Monday, Bronfman’s group said it had dropped out of the bidding war after submitting a US$6 billion proposal for the entertainment company last week and challenging an offer of more than US$8 billion from Skydance. The group informed Paramount that it was exiting the process, according to a statement on Monday.
“We continue to believe that Paramount Global is an extraordinary company, with an unrivalled collection of marquee brands, assets and people,” Bronfman said.
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The group, which included multiple wealthy individuals, pulled out in part because of a tight deadline to submit financial documents, according to a source familiar with the matter, who asked not to be identified because the deliberations were private. A spokesperson for Skydance declined to comment.
In putting together his proposal, Bronfman initially submitted a US$4.3 billion bid on Aug 19 that included an offer to purchase National Amusements, the Redstone family holding company that controls Paramount, for about US$2.4 billion. He increased his overall bid to US$6 billion two days later.
Paramount had already agreed to a merger with Skydance, the entertainment company founded by Ellison. That agreement initiated a 45-day “go-shop” period in which other bidders could attempt to make a better offer. Bronfman’s bid came right at the end of the period and caused the special committee in charge of considering offers to extend the window until Sep 5.
The proposals were similar in some respects. Both would pay about US$2.4 billion to acquire National Amusements, and both agreed to invest money directly in Paramount so that the company could reduce its debt.
The bids differed from there. Bronfman offered to buy Paramount shares from current investors at a slightly higher price, but in a much lower overall amount than what Ellison proposed. Ellison agreed to buy US$4.5 billion worth of stock from Paramount investors.
He also plans to merge Skydance into Paramount at a US$4.75 billion valuation. Bronfman argued that the Skydance valuation was too high and dilutive to shareholders. Bronfman offered to eliminate Paramount’s two classes of shares, giving all investors a say in company decisions. BLOOMBERG
