Paramount Global (PARA 12.11%) (PARA.A 10.90%) stocks surged by a staggering 12% at closing time on Friday, following a report by Puck News that revealed the interest of entertainment powerhouse Skydance Media and investment firm RedBird Capital Partners in a potential takeover bid for the conglomerate.
Potential Indirect Takeover Consideration
Puck News, citing insights from three reliable sources, disclosed that Skydance and RedBird are contemplating an indirect takeover of Paramount. The strategy involves acquiring majority control of Paramount by purchasing National Amusements, the current holder of approximately 77% of Paramount’s Class A voting shares. Although the discussions are still in their nascent stages, insiders have conveyed that preliminary steps such as signing NDAs and number crunching are underway.
Amidst its 52-week lows in October, Paramount’s market capitalization currently stands at $11.1 billion. The company also carries a substantial debt burden, with total debt touching nearly $17 billion in the latest quarter, inclusive of long-term debt amounting to around $15.6 billion.
Future Prospects for Paramount Investors
In recent times, Paramount’s stock has rebounded from its yearly low. The company’s most recent quarterly report displayed a reduction in quarterly losses, accompanied by news of prospective negotiations to bundle its Paramount+ streaming service with the Apple TV+. While the outcome of a deal with Skydance and RedBird remains uncertain, investors are hopeful that the stock, which has remained largely flat throughout 2023, may witness a surge in value in anticipation of a potential acquisition premium in the upcoming months.