Shares of media and entertainment conglomerate Paramount Global (NASDAQ:PARA) gained in trading after a CNBC report noted that David Ellison, Founder and CEO of Skydance Media, could be exploring a deal to take Paramount private.
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According to the report, Skydance has already sent preliminary information to Paramount, with due diligence yet to take place. Skydance, the diversified media company, is already in discussions with private equity firms, including RedBird Capital Partners and KKR (KKR), to buy National Amusements, the company that controls Paramount. National Amusements controls 77% of the company’s voting stock and is owned by Shari Redstone.
However, the Skydance and National Amusements deal depends on Skydance merging with Paramount.
According to another Bloomberg report, Apollo Global (APO) is also considering making a bid for National Amusements, though Skydance remains a top contender.
Shari Redstone is considering selling National Amusements as there has been a big shift in the media landscape from traditional television to streaming, and streaming giants like Netflix (NFLX) have deeper pockets to stream sports and entertainment content.
Is PARA a Buy or Sell?
Analysts remain bearish about PARA stock, with a Moderate Sell consensus rating based on three Buys, five Holds, and nine Sells. PARA has not fared well over the past year, down by more than 35%. In addition, the average PARA price target of $14.06 implies a downside potential of 1.3% at current levels.
