(Bloomberg) -- Producer David Ellison’s Skydance Media is set to become the new owner of Paramount Global after Seagram Co. heir Edgar Bronfman Jr. dropped out, ending one of the industry’s most dramatic acquisition contests.
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The storied Hollywood studio said it expects to complete the deal with Skydance in the first half of 2025 as it confirmed Bronfman’s retreat late Monday. It also ended its “go-shop” period that allowed it to look for other bidders. Paramount shares slid 5.4% in early trading Tuesday in New York.
Ellison, the son of Oracle Corp. co-founder Larry Ellison, is aiming to provide a fresh start to beleaguered Paramount, the parent of CBS and MTV. Laden with more than $14 billion in debt, the iconic Hollywood company has struggled to compete in streaming and has suffered as cable TV audiences canceled their subscriptions and abandoned traditional channels like CBS and Nickelodeon. It’s reducing its US workforce by 15% and shut down Paramount Television Studios this month.
Earlier on Monday, Bronfman’s group said it had dropped out of the bidding war after submitting a $6 billion proposal for the entertainment company last week and challenging an offer of more than $8 billion from Skydance. The group informed Paramount that it was exiting the process, according to a statement on Monday.
Bronfman’s team, which included multiple wealthy individuals, pulled out in part because of a tight deadline to submit financial documents, according to a person familiar with the matter, who asked not to be identified because the deliberations were private. A spokesperson for Skydance declined to comment.
In putting together his proposal, Bronfman initially submitted a $4.3 billion bid on Aug. 19 that included an offer to purchase National Amusements Inc., the Redstone family holding company that controls Paramount, for about $2.4 billion. He increased his overall bid to $6 billion two days later.
Paramount had already agreed to a merger with Skydance, the entertainment company founded by Ellison. That agreement initiated a 45-day “go-shop” period in which other bidders could attempt to make a better offer. Bronfman’s bid came right at the end of the period and caused the special committee in charge of considering offers to extend the window until Sept. 5.
The proposals were similar in some respects. Both would pay about $2.4 billion to acquire National Amusements, and both agreed to invest money directly in Paramount so that the company could reduce its debt.
The bids differed from there. Bronfman offered to buy Paramount shares from current investors at a slightly higher price, but in a much lower overall amount than what Ellison proposed. Ellison agreed to buy $4.5 billion worth of stock from Paramount investors.
He also plans to merge Skydance into Paramount at a $4.75 billion valuation. Bronfman argued that the Skydance valuation was too high and dilutive to shareholders. Bronfman offered to eliminate Paramount’s two classes of shares, giving all investors a say in company decisions.
(Updates with premarket trading in second paragraph.)
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