So, for anyone who thought that entertainment giant Paramount’s (PARA) deal with Skydance was a done affair, that may not be the case after all. One of the former bidders is coming back, and this time, with allegations that Paramount did its own shareholders wrong by passing on their offer. Said shareholders took the news quite well, however, and sent shares up fractionally in the closing minutes of Monday’s trading.
The offer from Project Rise Partners (PRP) was substantially superior to the Skydance deal, including what PRP noted was “…more cash per share to both Class A and Class B shareholders in Paramount,” noted an Axios report. PRP is made up of two different organizations: Malka Investment Trust and Rise Beyond LLC, which derive a lot of their funding from wealthy individuals working in finance, telecom, and media, among other fields.
The lawyers representing PRP note that PRP’s offer should have been considered. Paramount passed on the offer, however, over what it called timing issues. But the PRP lawyers pointed out that there was a go-shop period in effect—and indeed, we saw at least two other offers come in during that time, including one that extended the go-shop period somewhat—and the go-shop provision of the agreement with Skydance is itself unenforceable thanks to an earlier decision by the Supreme Court.
New Boss, New Properties
Though that may ultimately shake up the deal, for now, Jeff Shell is about to end up as President of Paramount. The former CEO of NBCUniversal, a Comcast (CMCSA) property, Shell is known for a “shoot first and aim later” philosophy, which could be helpful for Paramount as it looks for big new ideas.
One such big new idea may not be so welcome, though, as reports note Paramount+ will no longer be host to a slate of Star Trek movies. Everything from 1982’s Star Trek: The Wrath of Khan to 2002’s Star Trek: Nemesis will be heading off to Amazon (AMZN) and Prime Video. Losing Trek titles like that will likely not do Paramount+ any favors, and only time will tell what replaces their departed flagship titles.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on three Buys, six Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 13.49% loss in its share price over the past year, the average PARA price target of $12.67 per share implies 21.83% upside potential.
