Entertainment
Paramount breached deal by signing with Edgar Bronfman Jr
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In the latest twist in the Paramount Global M&A saga, Skydance Media claims the media company violated the terms of their merger agreement by accepting a rival $6 billion bid from investors led by billionaire Edgar Bronfman Jr.
Lawyers for David Ellison’s Skydance sent a letter Thursday to the special committee set up by Paramount to review M&A offers, accusing the committee of violating the terms of their deal by extending the negotiating period to accept Bronfman’s offer to consider – and threaten to withdraw their own $8 billion offer. plus proposal, the Wall Street Journal reported. Skydance’s legal team demanded that Paramount end negotiations with the Bronfman group.
“Paramount has committed an incurable, material breach of the Transaction Agreement,” Skydance’s letter to Paramount’s special committee said, the report said. According to the Journal, the letter also said: “Although Skydance is not currently exercising its right to terminate the Transaction Agreement, we reserve the right to do so in the future.”
Achieved by Varietyrepresentatives from Skydance, Bronfman and the Paramount board’s special committee declined to comment.
On Wednesday, the Bronfman-led investor group submitted a $6 billion bid – increased from the original $4.3 billion offer – to acquire Shari Redstone’s National Amusements Inc. and also purchase a minority stake in Paramount Global shares from non-voting shareholders. In response, the Paramount board’s special committee extended the go-shop period for considering bids that could credibly match Skydance’s offer by 15 days, until September 5.
On July 7, after months of back-and-forth discussions, Skydance and financial partner RedBird Capital Partners, along with NAI and Paramount Global, announced a binding agreement under which Skydance would purchase the shares of NAI (which owns 77% of the voting stock). power in Paramount Global) and then merge with Paramount. Under the terms of the deal, Paramount would have to pay a $400 million breakup fee to Skydance-RedBird if the media company chooses to proceed with a “superior” offer; The Bronfman consortium’s offer includes $400 million to pay for that.
Under the agreement reached by Skydance-RedBird, NAI and Paramount, the special committee of Paramount’s board of directors had a 45-day go-shop period (through August 21) during which it could “actively solicit alternative acquisition proposals and evaluate. .” If Paramount entered into discussions with a potential bidder that the board’s special committee determined would “lead in good faith or could reasonably be expected to result in a superior proposal,” the company would have the right to shop period can be extended until September 5. 2024.
(Pictured above: David Ellison, CEO of Skydance Media)