(Bloomberg) -- Seagram Co. heir Edgar Bronfman Jr. is close to making an offer for Paramount Global, setting off a potential bidding war for the film and TV company that owns CBS and MTV.
As part of his plan, Bronfman is weighing making an offer 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 aren’t public.
The details are still being worked out, the people said. A spokesperson 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 Chair Shari Redstone agreed to sell the family holding company and its 77% voting stake in Paramount to the younger Ellison for $2.4 billion.
Under that deal, Ellison and RedBird Capital Partners said they would invest more than $8 billion for a controlling stake in Paramount and merge the business with Skydance, which would be valued at $4.75 billion.
The companies agreed at the time to a 45-day period in which other potential bidders could submit competing offers.
Bronfman’s group is framing its proposal as a better deal for investors because it won’t include the dilution associated with the Skydance merger.
His group has held talks with possible 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 put together is, according to one of the people.
Shares of Paramount rose 7.1% to $10.96 at the close in New York. Credit-default swaps on the company’s debt narrowed to 179.12 basis points from 184.47 in the prior session.
Earlier this week Paramount began the process of cutting 2,000 US jobs, part of a cost-cutting drive across the company. Last week, the company reported a second-quarter loss after writing down the value of its flagging cable TV networks by $6 billion.
(Updates shares in second-to-last paragraph.)
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