(Times of Update) — Seagram Co. heir Edgar Bronfman Jr. is set to bid for Paramount Global, setting off a potential bidding war for the film and television company that owns CBS and MTV.
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As part of his plan, Bronfman is considering making a bid for National Amusements Inc., the Redstone family company that controls Paramount, as well as an investment in Paramount itself, according to one of the people, who asked not to be identified discussing plans that are not public.
Details are still being worked out, the sources said. A spokesman for Bronfman declined to comment.
Paramount agreed in July to merge with Skydance Media, the film production company founded by David Ellison, the son of Oracle Corp. billionaire Larry Ellison.
After months of negotiations, Paramount Chairman Shari Redstone agreed to sell the family holding company and its 77 percent stake in Paramount to the younger Ellison for $2.4 billion.
As part of the deal, Ellison and RedBird Capital Partners said they would invest more than $8 billion for a majority stake in Paramount and merge the company with Skydance, which would be valued at $4.75 billion.
The companies then agreed to a 45-day period during which other potential bidders could submit competing offers.
Bronfman’s group is pitching its proposal as a better deal for investors because it will not include the dilution associated with the merger with Skydance.
His group has held talks with potential backers, including Fortress Investment Group and streaming device maker Roku, The Wall Street Journal reported. Bain Capital is no longer working with Bronfman, one of the sources said.
Paramount shares rose 8.2 percent to $11.07 in New York trading. Credit default swaps on the company’s debt narrowed to 176 basis points from 184 in the previous session.
Paramount began cutting 2,000 jobs in the United States this week as part of a cost-cutting drive across the company. Last week, the company reported a second-quarter loss after writing down $6 billion in the value of its declining cable television networks.
(Updates stocks, adds credit default swaps.)
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