(Bloomberg) — Seagram Co. heir Edgar Bronfman Jr. is poised to make a 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 office that controls Paramount, as well as investing in Paramount itself, said one of the people, who spoke on condition of anonymity because plans were being discussed that are not public.
Details are still being worked out, the people said. A spokesman for Bronfman declined to comment.
Paramount in July agreed 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 and 77% voting control of Paramount to the younger Ellison for $2.4 billion.
Under that agreement, Ellison and RedBird Capital Partners said they would invest more than $8 billion for a controlling interest in Paramount and merge the company with Skydance, valuing it at $4.75 billion.
The companies agreed at the time that other potential bidders would be given a 45-day period in which to submit a competing bid.
Bronfman’s group is presenting the proposal as a better deal for investors because it does not take into account the dilution that would come 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, but film producer Steven Paul and a group of investors he brought together are, one of the people said.
Shares of Paramount rose 7.1 percent to $10.96 by the close in New York. Credit-default swaps on the company’s debt fell to 179.12 basis points from 184.47 in the previous session.
Earlier this week, Paramount began cutting 2,000 jobs in the U.S. as part of a cost-cutting effort within the company. Last week, the company reported a second-quarter loss after writing down the value of its ailing cable television networks by $6 billion.
(Updates shares in the second-to-last paragraph.)
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