Trophy asset extras serve purpose at own expense
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Jonathan Guilford
NEW YORK, Aug 27 (Reuters Breakingviews) -Obnoxious sports fans often say that second place is the first loser. That may be true for perennial trophy asset tire-kickers, too. Edgar Bronfman Jr., scion of the Seagram liquor dynasty, has walked away from an out-of-left-field run at a suffering media empire on Monday, nixing a bid for Paramount Global PARA.O after challenging on-again-off-again suitor David Ellison’s Skydance Media. Competing bidders add ostensible tension to sale processes. Problem is, if they regularly fail to follow through, credibility can take a hit.
Paramount – owner of broadcast network CBS, cable network MTV, and its eponymous movie studio – has been a honey trap for this crowd. As it goes with media assets, prestige is not always coterminous with financial rationale. Bids often require some crafty idea – like private equity firm Apollo Global Management’s APO.N attempt to carve out Paramount’s studio – or backers, including lenders, willing to take a risky punt.
Bronfman tried courting such a crew, from movie producer Steve Paul to “Mighty Ducks” actor Brock Pierce, but couldn’t line up enough equity, Reuters reported. Other familiar names also showed up on Paramount’s doorstep. Byron Allen – whose list of failed bids includes broadcaster Tegna TGNA.N, the Washington Commanders football team, Walt Disney’s DIS.N ABC network and more – lobbed in a bid. Even Warner Bros Discovery WBD.O boss David Zaslav, who nosed around the process, fits into this group, connected by industry bankers to a string of names over the years.
For bankers toiling to sell a company, there’s obvious advantage to going a few rows deep in the rolodex for a challenger. Allen, Bronfman, Zaslav and others really have consummated deals, and so if there’s a serious buyer, drumming up such interest can be a real threat. But such efforts can fall flat, too. Look no further than banker emails unveiled in court discussing the participation of self-described dealmaker Donald Trump in the bidding for the Buffalo Bills. Financial advisers acknowledged his long odds, but opined that his presence "doesn't hurt." According to court testimony reported by the Associated Press, he was not competitive.
While such processes have worked in the past - Walmart WMT.N heir Rob Walton paid a handsome, near-$5 billion price for the Denver Broncos after Vista Equity Partners chief Robert F. Smith poked around - too many failed Hail Mary attempts loom large. Bankers representing serious potential buyers won’t stop short of reminding the sell-side crew of previous flimsy counterbidders. If certain names come up too often, they may struggle to be taken seriously in future deals. And that’s important when a prime asset comes around. No potential buyer wants to walk in the door being the one who always seems to take second place.
Follow @JMAGuilford on X
CONTEXT NEWS
A consortium led by media executive Edgar Bronfman Jr. has withdrawn its bid for Paramount Global, the company announced on Aug. 26.
Bronfman had previously submitted an offer for the U.S. entertainment group during its “go-shop” period, a window in which it may solicit alternative suitors. The company, which comprises broadcaster CBS, cable channels including MTV and movie studio Paramount Pictures, struck an $8 billion deal with Skydance Media in July.
RedBird Advisors, Bank of America, Moelis and The Raine Group are acting as financial advisors to Skydance. BDT & MSD partners are advising National Amusements, which holds a controlling stake in Paramount. Rothschild is providing advice to Paramount, while Centerview Partners is advising the company's special committee.
Editing by Lauren Silva Laughlin and Sharon Lam
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.