The media merger landscape is heating up as Edgar Bronfman Jr., the former head of Warner Music and Seagram, is reportedly preparing a bid for Paramount Global. According to unnamed sources cited by The Wall Street Journal, Bronfman is in talks with various individuals and companies, including Fortress Investment Group, streaming device maker Roku Inc., and Hollywood producer Steven Paul, for support in his bid.
While a bid could be submitted in the coming days, discussions are ongoing and may not result in a formal offer. This news comes on the heels of Shari Redstone’s agreement to sell her media empire to David Ellison’s Skydance Media, a deal currently in a “go-shop period” ending on August 21. During this period, other potential buyers can submit offers. If Paramount chooses another offer, it will owe Skydance a $400 million breakup fee, as per a securities filing.
Bronfman had previously shown interest in acquiring National Amusements but didn’t proceed with a bid. Benzinga has not yet received any comment from Paramount, Bronfman Jr.’s Waverley Capital, Fortress, or Roku concerning the potential bid.
If Bronfman secures the necessary financing for his bid, he will face competition from David Ellison and his father, Larry Ellison, co-founder of Oracle, who have the right to counter any incoming offers. Bronfman’s plan includes offering Paramount shareholders the opportunity to own a larger portion of the company than they would under the Skydance deal. He has also discussed bringing in new partners from technology and other industries for potential strategic partnerships if he takes control of Paramount.
Paramount recently reported its first-ever quarterly profit from its streaming business, which includes Paramount+ and Pluto TV. However, the company also wrote down the value of its cable TV networks by $6 billion, highlighting the challenges facing traditional TV conglomerates. Paramount’s second-quarter revenue declined by 11% year-over-year, missing analysts’ expectations.
If Bronfman submits a bid, Paramount’s special committee of directors will determine whether to extend the go-shop period. The committee can extend the period if it is engaged in advanced discussions with another potential buyer.
Paramount Global’s Class B stock was trading 0.091% higher at $10.97 during Friday’s pre-market session, after closing at $10.96 on Thursday, according to Benzinga Pro. This development adds another layer to the evolving media merger landscape as Paramount seeks the best path forward for its future.
