Shari Redstone’s investment banker has pulled some unusual moves as he explores a possible sale of her Paramount media empire — and it’s adding to the gossip surrounding the closely watched deal talks.
Last May, National Amusements — a holding company that controls 10% of the stock and 80% of the voting shares of Paramount Global, owner of CBS and cable networks like Comedy Central, Nickelodeon and MTV — got a $125 million preferred-stock investment from BDT & MSD Capital Partners.
“BDT” stands for Byron David Trott — a former Goldman Sachs executive who has long been most famous for being Warren Buffett’s banker. (More on that in a moment.)
Trott also is advising Redstone on Paramount’s options, sources say.
Financiers say it’s worth noting that at Goldman, Trott wouldn’t typically have been permitted to do that preferred-stock deal, which carries a 7.75% interest rate.
That’s because Goldman, like most lenders, sees possible conflicts of interest arising from investing in a client while at the same time advising the client.
“This is like letting the fox in the hen house,” one source close to the situation opined.
One source close to the situation counters that Trott’s investment — recently increased by another $25 million — came shortly after Paramount slashed its dividend, and that he was simply protecting Redstone from the threat of a liquidity crunch.
The BDT preferred shares mature in 2028 or sooner depending on certain events in the agreement, according to a Standard & Poor’s credit report.
Nevertheless, a major question on Wall Street now is what Trott’s interests are exactly.
One major elephant in the room: Warren Buffett — a longtime client of Trott, although it’s not clear he’s currently a client — also happens to be Paramount’s biggest shareholder.
Buffett’s 15% stake is down about 60% since he began amassing it in early 2022.
According to a well-placed source, Buffett began amassing his stake shortly after Redstone hired Trott as her banker.
“She and Byron Trott are probably not having very comfortable conversations,” a source close to the situation added.
A year later on May 6 of last year — a few weeks before Trott bought his National Amusements stake — Buffett spoke at the annual Berkshire Hathaway Shareholders Meeting about Paramount, admitting he wasn’t thrilled.
“It’s not good news when any company slashes its dividend,” Buffett said.
“The movie business is one tough business,” added his late vice chairman, Charlie Munger.
As exclusively reported by The Post last week, Redstone has launched an auction of National Amusements and has sent nondisclosure agreements to buyout firms ahead of circulating the company’s financials.
Two sources close to the process, however, insist that Redstone is merely “exploring options” and that she isn’t determined to unload the assets.
Elsewhere, an insider notes that Skydance Media — the movie studio behind “Top Gun: Maverick” that’s run by Larry Ellison’s son David — got the first look at buying National Amusements this summer.
A key backer of Skydance is Gerry Cardinale, the dealmaker behind RedBird Capital — who also happens to be a former banker at BDT.
Last month, Paramount Global’s CEO Bob Bakish met with Warner Bros. Discovery CEO David Zaslav about a possible merger.
According to one source, the news sparked unsubstantiated rumors that it happened after Shari got suspicious that Trott and Cardinale might be getting too cozy.
In response, two well-placed sources quashed the rumor, insisting that it was Zaslav who asked for the meeting, also noting that Redstone and Ellison have known each other for years.
Spokespeople for Trott, Redstone, Cardinale declined to comment.
Warner Bros. Discovery and Buffett didn’t respond to requests for comment.