In a surprising turn of events, Seagram’s heir and media exec Edgar Bronfman Jr. has entered the Paramount saga. Skydance CEO David Ellison is not yet in the clear to merge the studio, as Bronfman has assembled a group of hopefuls to match the offer and buy out Redstone's company. But do the finances all line up? Matt Belloni and Alex Weprin reopen the next chapter of the Paramount bidding war that seems to have no end in sight.
What is Bronfman’s Paramount counteroffer? Just short of the end of the 45-day shopping period for Paramount Studios, the saga continues. The Skydance merger seemed like a done deal where Shari Redstone's entire company and shares would be acquired by the Ellison family. But in came Edgar Bronfman Jr. with a counteroffer. The businessman and former heir to Seagram's liquor had formerly run Warner Music. Bronfman is countering with the same amount of money for National Amusements; the only difference is where Skydance wants to merge, he wants to buy out. "Bronfman is saying, well, why would we do that? We don't need that. I can just buy this with my investors, and it's a cleaner, better deal there," says Belloni.
Who are the Bronfman deal investors? Bronfman pulled in what he believes is a compelling group of people, some of whom have direct connections to Redstone, like media executive John Miller. "It is interesting to me that Bronfman's group is so large; he sort of put out the feelers to anyone and everyone who might be interested in owning a legacy Hollywood studio," says Belloni. This raises concerns that the "motley crew" may not have secured the necessary financing. On the other hand, the Skydance acquisition only has a few players: the Ellison family and their partner, RedBird Capital. What it will come down to is what Shari Redstone wants and how high of a price the buyer is willing to pay.
What is next in the Paramount saga? It seems like the closure of a Paramount deal may be farther in sight than what was originally planned. Now that there is a counter bid, Paramount's board needs to examine the offers and ask Bronfman the hard finance questions. If the company receives a better offer, Skydance has an opportunity to match it. "So that's the key thing here. Even if Bronfman is able to make a better offer, Skydance, which clearly wants Paramount, will have the chance to match that offer," says Weprin.
