Shares of the media and entertainment company Paramount Global (NASDAQ:PARA) closed over 13% higher on Thursday. Moreover, it gained about 1% in after-hours trading. This notable increase in PARA stock came after Sony Pictures Entertainment, a subsidiary of Sony (NYSE:SONY), and Apollo Global Management (NYSE:APO), an asset management firm, made a $26 billion all-cash bid to acquire the company. The Wall Street Journal first reported this offer.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
This new bid comes as Paramount’s exclusive window for merger discussions with Skydance Media, an independent studio headed by David Ellison, is ending today.
Sony Could Take the Majority Stake in JV
Apollo had previously shown interest in acquiring Paramount for around $26 billion, including debts. However, Paramount’s board rejected APO’s offer due to concerns about financial arrangements. A joint bid with Sony is now seen as a solution to the board’s financing concerns.
Moreover, it is speculated that Sony would take majority control of the new joint venture (JV) and manage operations. Apollo, on the other hand, is likely to take control of the CBS broadcast network and its local television stations.
The outcome of Sony’s and Apollo’s bid for Paramount remains uncertain. Nevertheless, investors cheered the competitive offer, as evidenced by the rise in PARA’s stock price.
What Is the Projection for Paramount Stock?
Wall Street is sidelined on PARA stock. With six Buy, eight Hold, and seven Sell recommendations, Paramount stock has a Hold consensus rating.
Paramount stock has dropped nearly 39% in one year. Despite this underperformance, analysts’ average price target on PARA stock is $13.29, which implies 4.11% downside potential from current levels.
