After weeks of speculation, media executive Edgar Bronfman, Jr. has made his play for Paramount Global.
On Monday, the Wall Street Journal said the former Warner Music chairman formally submitted a $4.3 billion offer to buy out National Amusement, the majority shareholder of Paramount’s common stock, as well as a minority share of Paramount itself.
The offer includes a $1.75 billion payment to National Amusements and a separate $1.5 billion investment in Paramount, the Journal said. Both essentially match the bid made by Skydance Media to buy out National Amusements and merge its operations with Paramount.
Bronfman’s offer also includes a $400 million break-up fee that would be owed to Skydance if National Amusements and Paramount accept his offer over theirs, the Journal said. The media executive teamed up with movie producer Steven Paul to secure financing for his bid. Streaming hardware maker Roku was also pitched on joining Bronfman’s bid for Paramount, but the company ultimately did not.
The bid comes as Skydance, National Amusements and Paramount are set to conclude a 45-day “go shop” period by which the latter two companies would entertain other merger or acquisition offers before proceeding with Skydance’s deal. The window is set to close on Wednesday.
Like other media and entertainment companies, Paramount has found itself challenged by ongoing softness in the traditional television ad market and a shift away from legacy broadcast and cable networks toward direct-to-consumer streaming services. Paramount operates at least two such services — the free, ad-supported platform Pluto TV and premium streamer Paramount Plus — but, as a business segment, streaming has yet to overtake the revenue brought in by Paramount’s legacy film and TV operations.
But streaming has weighed on Paramount’s balance sheet, with the company taking on debt to pursue original content primarily for Paramount Plus, some of which failed to resonate with streamers. Revenue from streaming clocked in at $1.88 billion during Paramount’s most-recent financial quarter, a figure dwarfed by its legacy TV media business, which warned $4.217 billion during the same quarter.
