We all knew things were getting exciting with Paramount (NASDAQ:PARA) when the media company announced it was considering the Sony (NYSE:SONY) and Apollo Global Management (NYSE:APO) deal alongside any further offers from Skydance Media. But there’s still one more wild card in the race, one that hasn’t gone away quietly as some might have thought. Byron Allen is still in the hunt, reports note, though it hasn’t done much good for Paramount, down around 1.5% in Wednesday afternoon’s trading.
The latest reports suggested that Byron Allen is prepared to put up $30 billion to pick up Paramount, and Allen didn’t actively deny that he was able to bring that kind of capital to the table. In an interview with Bloomberg at the Milken Institute Global Conference, Allen noted that “capital was available,” but rather, it was “certainty of close” that was the major issue.
If Allen were prepared to put down $30 billion, he would be the front-runner. Yet, even Allen here sees the problem that many others have seen so far, noting that “…this deal will live or die at the FCC.” Here, Allen refers to the trouble that might be had from government regulators getting involved and spiking the deal over antitrust concerns, as has been the case with so many similar deals of late.
Government Intervention Is Possible
That last part is likely a line that’s occurred to everybody involved at this point. What if the FCC, the Department of Justice, or the FTC suddenly just decides to squash the whole affair? With an election year in progress, for better or worse, the odds that the government would suddenly get involved in a bid to energize its base is not out of line.
Such a course of action is being considered on some fronts and starts with finding an actual new CEO. The Office of the CEO arrangement going on right now isn’t going to fly for long, and most know that. Paramount’s creditors will have to be addressed as well, as there’s a mountain of debt to consider.
Is Paramount a Buy or Sell Stock?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on six Buys, eight Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 21.96% loss in its share price over the past year, the average PARA price target of $13.29 per share implies 4.36% upside potential.
