Now, here is a bit of a surprise for you: apparently, the recent return of Edgar Bronfman Jr. to the hunt for Paramount (PARA) just took an interesting turn. Bronfman is best known for his time with Seagram and his time running Warner Music Group (WMG). Though Paramount’s go-shop period to receive new merger bids shuts down Wednesday, Bronfman is trying to recruit a little more firepower to make the deal happen, and he’s looking to Roku (ROKU) to fill the role. That sent Paramount up fractionally in Monday afternoon’s trading.
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Basically, Paramount has one property that would likely be very attractive to Roku: Pluto TV. Yes, Paramount’s free ad-supported television (FAST) network might end up being a Roku property if Bronfman can convince Roku to join in on the hunt. There may also be a means to get in on Paramount+, the streaming arm of Paramount, which would further make Roku a potent force in streaming.
Given that there’s already some intersection going on between Paramount and Roku—both have deals with Walmart (WMT), and Pluto TV and Paramount+ run on Roku devices—having Paramount’s streaming apparatus would be a major coup for Roku. Roku, however, wasn’t commenting on “rumors and speculation,” so it’s unclear whether or not such a play will actually go through.
Bronfman Is Building Steam
Meanwhile, with two days left in the go-shop period, Bronfman is said to be building the bid to take over out from under Skydance, with Bronfman said to be working connections with bankers—and with Roku, of course—to pull in interest and cash to make the bid happen. However, reports suggest this may be a taller order than expected; not only would regulators likely look askance at such an arrangement, if the bid actually does succeed, Bronfman’s coalition would be on the hook for a $400 million breakup fee to Skydance.
Is Paramount a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on three Buys, seven Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. After a 22.78% loss in its share price over the past year, the average PARA price target of $12.07 per share implies 9.03% upside potential.
