Paramount: Skydance Offer Looks Superior, but Go-Shop Period Extended for Bronfman Bid

Edgar Bronfman Jr. and a consortium of investors have made a competing bid for control of Paramount Global. Paramount’s special committee determined that the offer is sufficient to extend the go-shop period, which has now expired for all other competing bids, to Sept. 5 to consider the Bronfman offer. Both the Skydance and Bronfman offers entail the buyer acquiring National Amusements and, with it, the bulk of Paramount Class A voting shares that National Amusements holds. Both also include a $1.5 billion cash infusion into Paramount, which will continue operating independently. We see two consequential differences between the offers: the extent to which Class B shareholders can cash out a portion of their position, and whether Paramount will acquire Skydance as part of the agreement. Comparing other details of the two offers is not straightforward, and both Skydance and the Bronfman group will have the opportunity to revise their bids. But as it currently stands, we believe Skydance’s offer is superior. We are maintaining our $20 fair value estimate for no-moat Paramount.