Mass media and entertainment studio Sony Pictures Entertainment, a subsidiary of Sony (NYSE:SONY), and asset management firm Apollo Global Management (NYSE:APO) held talks to make a joint bid for media and entertainment giant Paramount Global (NASDAQ:PARA). The news sparked an over 11% jump in Paramount stock during Thursday’s after-hours trading.
According to a report by The New York Times, the proposed deal may involve a cash offer aimed at privatizing the company.
It’s worth noting that Apollo had expressed interest in acquiring Paramount for a sum of about $26 billion, including debts. However, Paramount’s board dismissed the offer, citing concerns about Apollo’s financial arrangements. Concurrently, Paramount entered into advanced negotiations with Skydance Media, an independent studio led by David Ellison. Now, a joint bid with Sony is viewed as easing financing concerns, leveraging Sony’s operational expertise and additional financial resources.
Sony May Take a Majority Stake
Speculations are that Sony would take a majority stake in the joint venture, overseeing the operations. Meanwhile, Apollo is expected to take charge of the CBS broadcast network and its local television stations.
The success of Sony and Apollo in acquiring Paramount is uncertain at this point. Nonetheless, investors would likely welcome the emergence of a competing offer, as reflected by the jump in PARA’s stock price.
Is Paramount Stock a Good Buy?
Given the uncertainty regarding the acquisition, Wall Street remains sidelined on Paramount stock. It has six Buy, eight Hold, and seven Sell recommendations for a Hold consensus rating. The analysts’ average price target on PARA stock is $13.29, implying 21.15% upside potential from current levels.
