A last-minute overture for Paramount Global is getting more serious consideration from Shari Redstone and the company’s special committee of the board of directors.The multibillion-dollar bid from a group led by Edgar Bronfman Jr. arrived before the 45-day “go-shop” window for Paramount to evaluate alternate acquisition proposals was set to formally end on Aug. 21. The window has been extended, signaling that bid is being taken seriously as Redstone evaluates whether to go with an offer led by the heir to the Seagram family liquor fortune, Bronfman, or the heir to the Oracle software family fortune, David Ellison.Paramount’s special committee, which was organized to evaluate deal proposals, confirmed on Wednesday that “the receipt of an acquisition proposal from Edgar Bronfman, Jr., on behalf of a consortium of investors” qualified for consideration enough to extend the “go-shop” window until Sept. 5. The committee noted that during the window it “contacted more than 50 third parties to determine whether they had an interest in making a proposal to acquire Paramount.”The extension for a potential deal arrives as Bronfman raised his offer for a stake in Paramount and control of National Amusements from $4.3 billion to $6 billion, according to a Wall Street Journal report. A rep for National Amusements declined to comment.On July 7, Skydance and Paramount said that they had agreed to a merger proposal that would include the Ellison family and Gerry Cardinale’s RedBird Capital Partners investing $2.4 billion to buy Redstone’s holding company National Amusements. The bid would value a merged Skydance-Paramount at $28 billion if the deal closes.Additionally, for Paramount stockholders, $4.5 billion would be allocated “for the stock/cash merger consideration to be paid for publicly traded Class A shares and Class B shares, as well as $1.5 billion of primary capital to be added to Paramount’s balance sheet,” the companies said. The Santa Monica-based Skydance plans to install former NBCUniversal chief Jeff Shell if the merger closes.When the special committee said it unanimously approved Paramount’s merger with Ellison’s Skydance Media on July 7, it specified how the “go-shop” window would work. “There can be no assurance that this process will result in a superior proposal, and the Company does not intend to disclose developments with respect to the go-shop process unless and until it determines such disclosure is appropriate or is otherwise required,” the board committee said in a statement. If Paramount decides to call off its merger with Ellison’s company, it would be required to pay a $400 million breakup fee.Bronfman, the heir to The Seagram Co.’s liquor fortune, has run Universal Studios as well as Warner Music Group and held longtime board of director roles at multiple companies, including Barry Diller’s IAC. He also founded venture firm Waverley Capital.As employees wait for the merger and acquisition showdown to resolve, Paramount has been in a holding pattern, led by its trio of CEOs George Cheeks, Brian Robbins and Chris McCarthy. The company has identified $500 million in cost savings and is reducing its U.S.-based workforce by 15 percent. Year-to-date, Paramount stock has fallen about 23 percent.The Wall Street analysts that normally cover Paramount are only starting to offer theories about this turn of events. CFRA Research analyst Ken Leon maintained his “hold” rating and $12 stock price target on Paramount after initial news of the Bronfman bid (the company closed at $11.09 on Wednesday).“We think there are greater fundamental synergies with Skydance, and the final word comes from Shari Redstone, non-executive chair of Paramount and controlling shareholder,” he wrote. “We believe the greatest assets for Paramount reside within film production. Skydance remains an integral partner with Paramount on blockbuster movie franchises, such as Mission: Impossible, Top Gun: Maverick, Transformers and other movies.”Early on Wednesday, LightShed Partners analysts Richard Greenfield, Brandon Ross and Mark Kelley shared a different take, though, noting at least one backer of the Bronfman bid with a Redstone connection.“Unless the Redstone family wants Bronfman to bid, why would Bronfman be wasting all this time and effort, let alone rounding up nearly 20 outside investors to help him acquire Paramount?” the analysts asked. “Maybe the Redstones have had second thoughts about selling to Skydance/Ellison? Remember, just before the Skydance deal was reached, it appeared the entire transaction had collapsed.”The team concluded: “Or maybe this is all an elaborate ploy to drive up the price on Skydance/Ellison and force them to increase their bid. Or perhaps it is simply a way to diminish the legal risk of shareholder lawsuits associated with accepting the Skydance/Ellison bid. We honestly do not know.”
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