Paramount Global, one of Hollywood’s best-known companies, has received an improved last-minute offer from a group led by the veteran media executive Edgar Bronfman Jr that could gazump its planned $28bn (£21bn) merger with the independent film studio Skydance.
Bronfman, a former Warner Music CEO, and his consortium of investors have sweetened a proposed offer to acquire National Amusements, the vehicle that holds the media tycoon Shari Redstone’s controlling stake in Paramount, which also owns CBS, Nickelodeon and the UK’s Channel 5.
They are now prepared to offer $6bn, according to the Wall Street Journal, up from the $4.3bn that he had proposed earlier this week. Paramount confirmed in a statement that it had received an offer from Bronfman but did not disclose any financial details.
The future of Paramount Global has been the subject of fevered speculation in Hollywood for months. The latest proposal threatens to undo a deal agreed in early July by Skydance Media to merge Skydance with Paramount, a complex move that would end Paramount’s links with the Redstone family.
Redstone, whose father, Sumner, bought Paramount in 1994, gave the green light to the sale of the family’s controlling stake in the entertainment conglomerate, whose subsidiary Paramount Pictures has produced such classic films as The Godfather, Titanic and Breakfast at Tiffany’s.
Skydance had agreed to invest $8bn into the new company as part of the merger deal and pay a further $2.4bn to buy National Amusements, the Redstone-owned movie theatre operator that holds nearly 80% of voting shares in Paramount.
The independent film production group is led by the producer David Ellison, the son of Larry Ellison, the tech tycoon who co-founded Oracle.
However, the Skydance deal had contained a 45-day “go shop” period that allowed Paramount to solicit and evaluate other offers until a deadline of 21 August. This week Bronfman submitted his bids.
Paramount Global said it would now extend the deal negotiation period as it engaged with the Bronfman-led investor group.
“As a result the ‘go shop’ period is extended for the Bronfman consortium until 5 September 2024,” it said in a statement, adding that there could be no assurance that the approach would result in a better offer.
Paramount, in its latest earnings figures released earlier this month, reported an 11% drop in revenues to $6.8bn in the three months ending on 30 June, largely due to a drop in TV licensing revenues, and said it planned $500m in annualised cost savings.
The company said Paramount+, in its direct-to-consumer division, had seen a 12% rise in revenues after year-on-year growth in US subscriber numbers and pricing increases.
Paramount+ was also helped by hit programmes such as Knuckles, from the Sonic the Hedgehog video games franchise. The programme, voiced by Idris Elba, broke the global record for the most streamed original series on Paramount+ in the first days of its release in April.
However, the overall number of Paramount+ subscribers fell by 2.8 million to 68 million over the quarter, reflecting a planned exit from a South Korean partnership deal.
Paramount has indicated that if the Skydance deal goes ahead, the transaction is expected to close in the first half of 2025, subject to regulatory approvals.
Bronfman and Skydance have been approached for comment.
