Paramount Global (NASDAQ:PARA) witnessed an 8% surge in its stock on Thursday, driven by new merger and acquisition reports. This time, the buzz surrounds production studio Skydance Media’s interest in taking Paramount private.
According to CNBC, Skydance, alongside financial backers Redbird Capital and KKR, is actively engaged in discussions to acquire National Amusements, the holding company that houses Paramount and wields control over the media giant through its class A shares. Shari Redstone, currently serving as the non-executive chairwoman of Paramount Global and president of National Amusements (NAI), is a key figure in this potential deal.
National Amusements owns about 10% of Paramount’s equity capital value and holds a significant 77% of voting shares, valued at approximately $1 billion. Wells Fargo analyst Steve Cahall notes that this valuation may not include a possible “meaningful control premium.” The proposed deal, currently in its early stages, would hinge on merging Skydance with Paramount, potentially resulting in the media company going private. However, the report emphasizes the uncertainty inherent in such talks, leaving the possibility of negotiations falling through.
Both Paramount and Redbird Capital have refrained from commenting on the matter, while National Amusements and Skydance Media have yet to respond to Yahoo Finance’s inquiries.
Apart from Skydance, Warner Bros. Discovery (WBD) has surfaced as another potential buyer. Speculations arose when WBD CEO David Zaslav and Paramount CEO Bob Bakish reportedly met in December to discuss a potential merger. Paramount, due to its relatively small size compared to competitors, has become an attractive prospect for a breakup or merger, especially as the industry anticipates the next major media consolidation.
Paramount’s current market capitalization stands at around $9 billion, notably dwarfed by Disney’s $171 billion and Netflix’s nearly $240 billion. The company has recently committed to divesting non-core assets as part of its strategy to reduce debt and enhance its balance sheet. Last year, it finalized the $1.62 billion all-cash sale of Simon & Schuster to investment firm KKR after the initial deal with Penguin Random House fell through.
Showtime and BET Media Group have also been subjects of recent sale rumors. In December, reports emerged that Paramount was in talks to sell BET to its CEO Scott Mills and CC Capital Partners, a private investment firm led by former Blackstone executive Chinh Chu, for a discussed price of just under $2 billion.
Analysts foresee a potential Paramount deal triggering a media merger and acquisition frenzy. Bank of America analyst Jessica Reif Ehrlich predicts that Warner Bros. Discovery and NBCUniversal could also be impacted by consolidation within the next 18 to 24 months.
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Author Faith Yakubu 
