The way forward for Outstanding Global remains to be uncertain.
Paramount's special committee on Wednesday said it might extend an agreed “go-shop” period by 15 days period of its merger agreement with Skydance while it considers a competing offer from Edgar Bronfman Jr.
Bronfman initially offered $4.3 billion late Monday night for Shari Redstone's National Amusements, Paramount's majority shareholder, in response to an individual acquainted with the offer. Under the offer, Bronfman would acquire a minority stake in Paramount. But after making the bid, Bronfman raised additional funds to support the next offer, said the person, who asked to not be identified to debate the main points of the offer.
On Wednesday, Bronfman increased his bid and submitted a revised offer of $6 billion, the person said.
The offer is meant to switch Paramount's merger agreement with Skydance Media, which was reached in early July and concluded a months-long negotiation process. The agreement included a 45-day “go-shop” period during which Paramount could solicit additional offers.
A spokesman for Bronfman declined to comment.
The special committee confirmed on Wednesday “receipt of a takeover proposal from Edgar Bronfman Jr. on behalf of a consortium of investors.”
“This extends the 'go-shop' period for the Bronfman Consortium under the transaction agreement, to which the Company remains subject, until September 5, 2024,” the Committee said in an announcement. “There is no assurance that this process will result in a superior offer. The Company does not intend to announce any further developments unless it determines that such announcement is appropriate or otherwise necessary.”
The committee added that it had contacted greater than 50 third parties through the initial “go-shop” phase to gauge potential takeover interest. For all other parties, the go-shop phase will expire before midnight on Wednesday, the committee said.
The Skydance buyer consortium, which also includes private equity firms RedBird Capital Partners and KKR, has agreed to take a position greater than $8 billion in Paramount and acquire National Amusements. The deal gives National Amusements an enterprise value of $2.4 billion, including $1.75 billion in equity.
Under the Skydance deal, Paramount's Class A shareholders would each receive $23 in money or stock, and Class B shareholders would receive $15 per share. That would give public shareholders a complete of $4.5 billion in money. Skydance also agreed to inject $1.5 billion into Paramount's balance sheet.
National Amusements owns 77% of Paramount's Class A shares and 5% of its Class B shares. If the Skydance transaction were accomplished, National Amusements would own all of Paramount's Class A shares and 69% of its Class B shares outstanding.
Bronfman's first offer called for a $1.75 billion purchase of National Amusements. That offer, just like the Skydance deal, included a $1.5 billion investment in Paramount's balance sheet and in addition included assuming the $400 million severance payment Paramount would owe Skydance if it backed out of the deal, in response to the person acquainted with the deal.
The improved offer submitted Wednesday now includes $1.7 billion for a young offer that provides Paramount's non-Redstone non-voting shareholders the choice to receive $16 per share, the person added.
Bronfman previously ran Warner Music and spirits manufacturer Seagram and was also chairman of Fubo TV since 2020. Details of his application were first reported from the Wall Street Journal.
The merger agreement between Paramount and Skydance has caught the eye of shareholders. Asset manager Mario Gabelli According to reports filed a lawsuit demanding Paramount release its books related to the Skydance deal – a possible first step toward a lawsuit difficult the deal. Investor Scott Baker According to reports filed a lawsuit to dam the deal, arguing it might cost shareholders $1.65 billion.
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