Byron Allen makes $14 billion offer to Paramount Universal

(Bloomberg) — Media mogul Byron Allen has made a $14.3 billion takeover offer to acquire all outstanding shares of Paramount Global, according to people familiar with the matter.

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Allen offered $28.58 per share for Paramount’s voting shares, a 50% premium over recent transactions, and $21.53 for the non-voting shares, according to people familiar with the matter who asked not to be named. , the total transaction value rose to approximately US$30 billion.

Paramount’s non-voting shares surged 22% to $16.70 in premarket trading Wednesday. If the gains continue, it will be the largest intraday gain since March 2020.

His company, Allen Media Group, confirmed he made the offer in a statement to Bloomberg News. Representatives for Paramount declined to comment.

Allen’s company said in a statement: “This $30 billion acquisition offer, including debt and equity, is the best solution for all Paramount Worldwide shareholders and should be taken seriously and pursued.”

Read more: Paramount CEO asks employees to stay focused amid deal speculation

Paramount – one of the crown jewels of the global media empire controlled by the Redstone family – will be a tough deal. In the first nine months of last year, the company’s operating income before depreciation and amortization was $1.87 billion, an increase of 30% over the same period last year and a decrease compared with the previous year. Sales were flat at $22 billion. Allen borrowed the money at much higher interest rates than on some of his previous acquisitions.

According to Bloomberg:

Byron Allen’s $14 billion bid for Paramount further fueled M&A speculation, with Skydance Media, Apollo Global and Warner Bros. ) also expressed interest. Given Paramount’s $15.6 billion in debt, we’re skeptical a deal can happen anytime soon. Further complicating matters is parent company National Amusements owns 77% of its voting stock.

— BI analysts Geetha Ranganathan and Kevin Near

Allen’s plan is to sell Paramount Studios, real estate and other intellectual property rights, according to people familiar with the matter. He will retain the television channels, including the Paramount+ streaming service, and operate them in a more cost-effective manner. Banks and other investors are lining up, people familiar with the matter said.

Paramount, the parent company of CBS, Nickelodeon and other channels, has been in talks to acquire the Redstone family’s stake since independent producer David Ellison began discussing it last year. Been involved for months.

Allen sent his offer via text message and email to Paramount senior management and board members.

Allen, a stand-up comedian who has dabbled in television production, has spent more than $1 billion in recent years acquiring properties such as The Weather Channel and a string of local stations from Honolulu to Tucson. If the acquisition goes through, he will transfer his existing television assets to the new company.

Allen said he has a better chance than many to acquire media assets because he already has regulatory approval to own TV stations. However, his TV station group is not yet large enough to trigger ownership restrictions.

Allen made a bid for Paramount’s BET and VHF channels last year, reaffirming his $3.5 billion offer in an email to the board last month.

In September, he sent a text message to Walt Disney Co. CEO Bob Iger proposing $10 billion (albeit tentatively) for Disney’s flagship ABC broadcast network as well as FX and National Geographic cable channels. . Iger, who had previously said he would consider offers, later said he did not want to sell.

Allen has made numerous failed attempts to buy properties ranging from television station owner Tegna Inc. to the Denver Broncos football team.

—With help from Subrat Patnaik.

(Updates share in third paragraph.)

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