Edgar Bronfman Jr. drops pursuit of Paramount
Mr. Bronfman’s decision to suspend the bid almost guarantees that Paramount will be purchased by Skydance. The up-and-coming Hollywood company has spent much of this year courting and cajoling Paramount into a merger agreement. Skydance and Paramount reached an $8 billion merger deal in July. However, the deal included a window for Paramount to look at other buyers. Bronfman said in a statement that “Paramount’s best days are ahead.”
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“While there may have been differences, we believe that everyone involved in the sale process is united in the belief that Paramount’s best days are ahead,” Mr. Bronfman said. “We congratulate Skydance and thank the Redstone family and the special committee for their engagement during go-shop.”
Mr. Bronfman said in his statement that Paramount was “an extraordinary company,” calling it “an unrivaled collection of marquee brands, assets and people.”Paramount’s special committee said in a statement that it was concluding its deal process, adding that it had contacted more than 50 potential bidders since July to see whether they were interested in acquiring Paramount.“We thank Mr. Bronfman and his investor group for their interest and efforts,” said Charles Phillips Jr., chairman of Paramount’s special committee.
Mr. Bronfman’s pursuit seemed to have slowed down over the past week as Paramount, and its parent company National Amusements, scrutinized his bid. Some people involved in the deal were skeptical that Mr. Bronfman would be able to prove he’d secured financing to justify his $6 billion bid in time, said the people, who requested anonymity to discuss confidential negotiations.
Like every development in the sale of Paramount, Mr. Bronfman’s bid was rife with drama. Last week, days before a crucial deadline expired, his group submitted a proposal to take a controlling stake in Paramount for $4.3 billion with a crew of backers that initially included Brock Pierce, a cryptocurrency entrepreneur also known for his role in the “Mighty Ducks” movie franchise.
Mr. Pierce was not part of the final bidders, which included institutional investors like Fortress Investment Group, BC Partners Credit, and others. A person familiar with the situation said that some of Mr. Bronfman’s backers were reluctant to provide detailed financial statements as part of the due diligence process. The vetting process was halted because they were unwilling to provide such information. The “go shop” procedure also slowed down Mr. Bronfman’s bid, as it imposed tight deadlines on the submission and evaluation of his bid. He informed Paramount’s Special Committee on Monday night that he would be withdrawing from the process. The competing bids for Paramount highlighted the enduring cultural cachet the company has. It owns a crown-jewel film studio, an extensive library of movies and television shows, and is one of the three major broadcast networks. Before he dropped his pursuit, Mr. Bronfman said he was prepared to offer $6 billion to acquire a controlling stake in National Amusements and a minority stake in Paramount.
With its other options exhausted, Paramount will now look to close its deal with Skydance, which has offered $8 billion in capital to buy out Ms. Redstone, pay down debt, improve the company’s balance sheet and buy out existing investors.
After Mr. Bronfman submitted his initial bid last week, Skydance began working behind the scenes to press its case. Skydance sent a letter to Paramount’s special committee requesting that the company cease negotiations with Mr. Bronfman. The company argued that Paramount had not fulfilled its obligations in the framework of the current deal. Paramount continued to negotiate with Mr. Bronfman regardless.
If Paramount’s deal with Skydance is closed, led by David Ellison it will result in the transfer of media ownership from a wealthy family to another. Paramount has been owned by the Redstone family since Sumner’s patriarch built the company through a series audacious deals. Mr. Ellison’s father, Larry Ellison of Oracle fame, is supporting his son’s bid to buy Paramount.
