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Shari Redstone appears to be adamantly opposed to disbanding Paramount Global.
The Financial Times, citing unnamed sources, said Redstone, president of National Amusements Inc., Paramount Global’s controlling shareholder, is considering an $11 billion acquisition of Paramount’s film and television studios by Apollo Global Management. He said he was “not satisfied” with the proposal. The reported price would represent a premium over the company’s overall market capitalization. Instead, Redstone partnered with Redbird Capital and Tencent to negotiate a deal with Skydance’s David Ellison to sell NAI (and subsequently merge Skydance with Paramount Global), the FT reports. He hopes to continue.
On Thursday, Paramount Global’s stock price fell more than 5% following the FT report while broader market indexes rose. This comes after the stock price soared nearly 12% following a report in the Wall Street Journal that Apollo had offered $11 billion to buy Paramount Pictures and Paramount TV Studios Group. .
Apollo’s bid does not include CBS, Paramount Global’s cable networks (BET, Comedy Central, Nickelodeon, MTV, etc.) or its streaming division, which includes Paramount+ and Pluto TV. Redstone is reluctant to sell the studio because such a deal would “remove very little value to what remains of Paramount,” FT reported.
Paramount Global, NAI, and Apollo Global have not commented on the latest M&A report.
Some Wall Street analysts believe that breaking up Paramount Global into pieces isn’t necessarily in the best interest of shareholders. “We believe there is too much interconnectivity between film and TV IP, and by extension, between TV, studios, and the recently fragmented DTC sector, and it is not worthwhile to sell Paramount Global separately. We think it’s disruptive.” David Joyce is a media and entertainment analyst at Seaport Research Partners. He added that he remains positive on the stock “as there is interest from strategic and financial buyers for some or all of Paramount Global’s assets.”
If Paramount Global sells its studio business, “the rest of the company may look empty,” Moffett Nathanson analysts led by Robert Fishman and Michael Nathanson wrote on March 20. I wrote a research note on the day. It’s possible the company could enter into new “creative deals” to license content from other studios, “but this would be a fundamental change in the flywheel for an already declining company.” they added.
That said, Apollo’s studio bid “could help Paramount secure a company-wide price increase if that’s the preferred path without breaking up the company,” Moffett-Nathanson’s team said. writing.
Paramount Global CEO Bob Bakish was asked about reports regarding deal negotiations during the company’s 2023 fourth-quarter earnings call last month. “When it comes to M&A, at Paramount we’re always looking for ways to create shareholder value. And let me be clear, that’s for all of our shareholders,” he said. “But I’m not going to comment on any speculation or schedule or anything like that. But that’s obviously what we’re focused on.”
Paramount Pictures’ library includes more than 1,000 movie titles with rights to an additional 2,500 titles, featuring the work of filmmakers such as Martin Scorsese, JJ Abrams and Michael Bay. Its library includes “Star Trek,” “The Godfather,” “Transformers,” “Indiana Jones,” “Scream,” the “Mission: Impossible” series, as well as “Braveheart,” “Forrest Gump,” “Titanic It also includes Oscar-winning films such as “.
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