Paramount Stock Soars on News of Sony Pictures, Apollo Joint Bid Talks

Paramount Stock

Shares of Paramount Global (NASDAQ:PARAA) surged over 10% on Friday following a Reuters report suggesting discussions between Sony Pictures Entertainment (NYSE:SONY) and Apollo Global Management (NYSE:APO) regarding a collaborative bid to acquire the media giant.

Paramount is currently in exclusive deal negotiations with Skydance Media, an independent studio led by David Ellison. Despite this, some investors are pushing for Paramount to explore alternative options.

Previously, private equity firm Apollo had proposed a $26 billion bid for the company, along with a separate $11 billion offer for Paramount’s film studio. The joint bid with Sony, still in the process of being structured, aims to acquire all outstanding Paramount Global shares for cash, ultimately taking the company private, according to a Reuters source.

Under the proposed arrangement, Sony would hold a majority stake in the joint venture and oversee the media company, including its extensive library of films such as “Star Trek,” “Mission: Impossible,” and “Indiana Jones,” along with beloved television properties like SpongeBob SquarePants.

Apollo, on the other hand, is expected to assume control of the CBS broadcast network and its local television stations.

Since April 3, when Reuters first reported Paramount’s commencement of 30-day exclusive negotiations with Skydance, Paramount shares have declined by nearly 7%. At its most recent closing price of $10.97, Paramount was valued at $7.44 billion, according to LSEG data.

Paramount Global has witnessed a staggering loss of over $16 billion in value since its formation through the merger of CBS and Viacom in 2019. The company’s market capitalization dipped below $10 billion in January.

With a revenue decrease of nearly 2% last year, Paramount is grappling with the shifting consumer preference from traditional linear television to streaming platforms. Despite reporting subscriber growth in recent quarters, its streaming unit, Paramount+, remains unprofitable.

Year-to-date, Paramount stock has declined by 19%, and a majority of analysts have a “hold” or lower rating on the stock.

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