Shares of Paramount Global (PARA 12.11%) (PARA.A 10.90%) closed up 12% on Friday after Puck News reported that the entertainment conglomerate is the subject of takeover interest from Skydance Media and RedBird Capital Partners.
Skydance and RedBird mull an indirect takeover
Citing three sources familiar with the situation, the media outlet said that Skydance and RedBird are considering indirectly taking control of Paramount — by acquiring media company National Amusements, which currently owns around 77% of Paramount’s Class A voting shares. The talks are still very early-stage, however. Its sources told Puck News: “There’s no official process or dealbook, but NDAs have been signed, and a small group is said to be working up the numbers.”
For perspective, Paramount’s market capitalization after today’s pop sits around $11.1 billion, and the company ended its most recent quarter with total debt of nearly $17 billion (including long-term debt of around $15.6 billion).
What’s next for Paramount investors?
Paramount stock has rallied from its 52-week lows set in October. That’s as its latest quarterly report demonstrated shrinking quarterly losses, and amid recent news it was in talks to bundle its Paramount+ streaming service with Apple TV+.
There are no guarantees, of course, that Skydance and RedBird will proceed forward with a deal. But with shares of Paramount now trading roughly flat year to date in 2023 on the heels of this news — badly lagging a roughly 20% rally for the S&P 500 index — it’s hard to blame investors for hoping a juicy acquisition premium materializes in the coming months.
