(This story, originally published on August 21, has been resubmitted to correct RedBird’s writing style, in paragraph 8.)
LOS ANGELES (Reuters) – Veteran businessman Edgar Bronfman has sharpened his bid for Paramount Global Inc. with a $6 billion offer for the controlling stake in National Amusements Inc. and a minority stake in Paramount, a person familiar with the matter said.
It had previously offered $4.3 billion, according to Reuters sources. Paramount shares rose more than 2.4 percent after the market closed.
Paramount said Wednesday it had received a takeover offer from Bronfman on behalf of a consortium of investors, but did not disclose terms.
A competing bid for the headquarters of Paramount Pictures, broadcaster CBS and cable networks such as MTV threatens to derail the takeover plan by businessman David Ellison and his company Skydance Media.
Bronfman’s new offer includes $3.2 billion in cash that could be used to pay down Paramount’s debt or to buy out Paramount’s non-voting shares held by investors other than the Redstone family for $16 billion in cash, said the source, who asked not to be identified because the information is not public.
The board and a group of investors led by Bronfman will decide how to allocate the money, the person added.
That compares to Skydance’s $8.4 billion deal to acquire Paramount in a complex two-step transaction that involved Paramount acquiring Ellison’s smaller independent media company in an all-stock transaction.
Ellison and his partner in the deal, Red Bird Capital Partners, have committed $4.3 billion to buy Paramount’s Class B shares for $15 in cash each, and the partners have also committed to providing at least $1.5 billion to the company’s balance sheet.
Bronfman offered $2.4 billion in debt and equity for National Amusements, matching the terms of the Skydance purchase agreement, according to a takeover proposal submitted Monday to Paramount Chairman Charles Phillips and seen by Reuters.
National Amusements owns the Redstone family’s controlling interest in Paramount.
Bronfman said in the letter that his offer was better because it would eliminate the risks and costs associated with merging Paramount and Skydance.
The source said his bid, if successful, would cover the $400 million breakup fee owed to Skydance.
“We believe many board members are supportive of a proposal that excludes dilution of Skydance shares,” Lightshed Partners analyst Rich Greenfield said in a note published Tuesday.
Skydance declined to comment Wednesday, and Bronfman did not respond to a request for comment.
Bronfman’s investor group includes Fortress Investment Group and Jeff Ubben, founder and managing partner of Inclusive Capital Partners, according to an Aug. 19 letter seen by Reuters.
Cryptocurrency entrepreneur Brock Pierce and Kazakhstani investor Nurali Aliyev, who were previously part of Bronfman’s group, are no longer listed as investors in amended documents submitted to Paramount’s board, according to an Aug. 20 letter seen by Reuters. That document also listed 65 other parties Bronfman had contacted to discuss joining his investor group.
Skydance and Paramount had agreed to a 45-day “shopping” period to allow the publicly listed media company to solicit and consider other offers.
Paramount said a special committee of the board of directors has extended the Wednesday deadline for Bronfman’s union to Sept. 5.
The group led by Ellison will have the opportunity to make a counteroffer, the source added.
The Wall Street Journal was the first to report Bronfman’s improved offer.