Edgar Bronfman’s Paramount bid could keep Shari Redstone involved

Edgar Bronfman Jr.’s offer for a controlling stake in Paramount Global could keep Shari Redstone close to the company, if his bid is successful.

Bronfman is open to having Redstone, currently non-executive chairman at Paramount, remain involved with the company if the Paramount special committee accepts his consortium’s bid for National Amusements, the controlling shareholder, according to a person familiar with the matter.

Bronfman has raised $6 billion to challenge Skydance Media for ownership of National Amusements, the holding company founded by Sumner Redstone, according to people familiar with the matter. Both Bronfman’s bid and Skydance’s bid would also include money to buy out a percentage of Paramount Global common shareholders.

At $6 billion, Bronfman’s bid would give cash to about 20% of Class B holders at $16 per share. Skydance would pay out about 50% of current Paramount common investors at $15 per share as part of its bid, according to the people familiar.

It’s not clear if Redstone prefers one offer over the other. The Paramount Global special committee will determine if Bronfman’s offer is a superior proposal for shareholders by Aug. 28. If the committee decides Bronfman’s offer is better, Skydance will then have four business days to match. The deadline for the entire process to be concluded is Sept. 5.

Bronfman still has a few more days to raise more money for a competing bid to counter Skydance, which agreed to an $8 billion deal to merge with Paramount Global last month. The special committee earlier this week extended the so-called “go-shop” period — during which it could entertain competing offers — by 15 days to review Bronfman’s initial bid.

One of the individuals who is part of Bronfman’s bid is former AOL CEO Jon Miller, suggesting Redstone could potentially have more control over a future Paramount Global than she’d get with Skydance. Miller, a close ally of Redstone, has been connecting Bronfman with potential capital and would likely take a role with the company if it came under Bronfman’s stewardship — perhaps a board seat and an operational job — according to people familiar with the matter. Bronfman would be CEO of the company if his deal were to be accepted and go through, said the people.

Miller, Redstone and Redstone’s son-in-law, Jason Ostheimer, together run Advancit Capital, a small venture capital firm that invests in media and technology. The trio are the only three people that appear on the firm’s website. Miller has also operated as a de facto strategic advisor to Redstone for many years, according to people familiar with the matter.

Redstone has not spoken with Miller about the bid, according to people familiar with the matter.

While the Redstone family and Bronfman family have run in similar circles, including donating heavily to Jewish foundations, Edgar Bronfman Jr. and Shari Redstone haven’t met many times and don’t have a close preexisting relationship, two of the people said.

Skydance CEO David Ellison and Redstone have had several discussions about the potential for Redstone to stay in as a shareholder of a combined Skydance-Paramount Global, according to people familiar with the matter.

Redstone is taking a wait-and-see approach to any future involvement she may want to have in Paramount Global moving forward regardless of its ownership, according to a person familiar with her thinking.

Spokespeople for Redstone, Bronfman, the Paramount Global special committee and Skydance all declined to comment.

Bronfman has spent the last few weeks aggregating individuals with interest in owning a piece of Paramount Global, including film producer Steven Paul and Patron cofounder John Paul DeJoria, who had previously considered a bid of their own, according to a person familiar with the process, as well as Fortress Investment Group, the credit arm of private equity firm BC Partners, and former Turner Broadcasting CEO John Martin.

Bronfman’s financing comes from many different sources, which may potentially trigger regulatory concerns if too much of the money is from foreign entities. Having so many different financers may also make Bronfman’s offer riskier than Skydance’s bid, which is backed by private equity firm RedBird Capital and multibillionaire Larry Ellison, the father of David Ellison.

Bronfman is the chairman of Fubo, a sports streaming service, and the former head of Universal and Warner Music.

Skydance’s lawyers sent a letter to the Paramount Global special committee demanding the company stop negotiating with Bronfman, the Wall Street Journal reported Thursday. Skydance said Paramount Global breached the terms of the go-shop agreement by not alerting Skydance that it planned to extend the window, the report said.

Skydance also argued the special committee didn’t have the right to extend the go-shop because a bid had to “reasonably be expected to lead to a superior proposal.” Skydance argued the Bronfman bid didn’t meet the criteria.

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