Posted in: Movies, Paramount+, TV | Tagged: paramount, Paramount Global, Skydance

Paramount Global/Skydance Deal Gets Edgar Bronfman $4.3B Counter

With the Skydance Media agreement in play, Edgar Bronfman Jr. submitted a $4.3B counter offer for Paramount Global within the 45-day window.

So here's the thing about that deal that David Ellison's Skydance Media, Gerry Cardinale's RedBird Capital, and Shari Redstone's National Amusements Inc (NAI) announced back in July that would lead to Skydance owning Paramount Global. Even with the process by which Skydance would take over pretty well laid out, the tentative agreement did give Redstone a 45-day window to field offers from other parties. Previously, Apollo Global Management (alone and with Sony Pictures), Barry Diller, and Edgar Bronfman Jr. had explored bids for Paramount Global – but it wasn't clear at the time if they or anyone else would entertain a challenge to Skydance's offer (especially with the $400 million "breakup" fee that Skydance would receive if Paramount went in a different direction). Well, Deadline Hollywood is reporting that Bronfman hasn't given up yet – tendering an offer for Paramount Global before the 11:59 pm ET deadline on August 21st, an offer estimated to be worth $4.3B.

Based on reporting, the new deal on the table would include a $2.4B payment to Redstone for  National Amusements, which controls Paramount Global through its majority of Class A voting shares. In addition, $1.5 billion would be added to the company's balance sheet to pay down some debt and maintain investment grade – with the remaining funds set to be applied to the $400 million "breakup" fee. In addition, other Paramount shareholders wouldn't be taken out of play, with the company maintaining its publicly traded status. Here's a look at the details from the previously announced Skydance/Paramount Global agreement:

Here's The Skydance/Paramount Global Deal Details: Skydance will merge with Paramount in a transaction that will reportedly value New Paramount at a value of approximately $28 billion. Existing Skydance investors will receive 317 million newly issued Class B shares in New Paramount valuing Skydance at $4.75 billion based on $15 per Paramount Class B share.

Skydance IG, led by the Ellison Family and RedBird Capital Partners, will invest up to $6 billion to:

• Offer Class A stockholders other than NAI an election to receive in the merger $23 cash per share or 1.5333 shares of Class B stock of New Paramount;
• Offer Class B stockholders other than NAI an election to receive in the merger $15 cash per share or one share of Class B stock of New Paramount, subject to proration if Class B elections exceed $4.3 billion in the aggregate (approximately 48% of the non-NAI float as of the date of this release);
• Use the additional capital to pay down existing debt and re-capitalize the balance sheet of New Paramount to support strategic initiatives.

The merger consideration represents a 48% premium to the price of the Class B stock as of July 1, 2024, and a 28% premium to the Class A stock on the same date. Also, by continuing to own shares of the new combined company, Paramount Class B stockholders will have the opportunity to participate in the new company's long-term value creation potential.

NAI and its owners have entered into a definitive agreement to sell NAI to Skydance IG for $2.4 billion on a cash-free, debt-free basis. Following completion of the transaction, only Skydance IG will hold Class A shares.

Following the close of the transaction and the growth equity investment and assuming full participation in the cash election by Class B stockholders, Class B stockholders will own approximately 30% of the outstanding equity of New Paramount and Skydance IG will own approximately 70% of the outstanding equity of New Paramount.

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