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Paramount Global shares soared in afternoon trading after reports that Apollo Global made an $11 billion bid for the company’s film and television studios. The private equity giant has been in and out of suitors, including David Ellison’s Skydance Media and Byron Allen.
Heading into the market close, the stock was up more than 11% at $12.48, on higher volume than usual. That number is still only half of what it was a year ago, as the company battles streaming losses and heavy debt. It has been the target of a takeover bid in recent months without any agreement in place.
WSJ, citing people familiar with the situation, said the board is considering the Apollo program. Deadline reports that Ellison has offered to buy the entire company, but did not provide details. There is speculation among some industry insiders that Larry Ellison would never support a loss-making proposal like Paramount’s. After all, Larry Ellison cut off Megan Ellison’s Annapurna wing, which caused it to bleed. But this is a hasty generalization. We hear that the Oracle co-founder is fully aligned with David Ellison, and he’s always going to make a good deal in the end.
Shari Redstone, Par’s majority shareholder, doesn’t want the studio’s crown jewel to be uprooted and sold.
Skydance Media offered the deal through Paramount Global’s parent company, National Amusements, the Redstone family holding company that controls the media company.
The situation is complicated because while minority shareholders, who happen to include Warren Buffett and Mario Gabelli, are worried about not getting a premium on the deal, Shari is. Mr. Allen’s proposal, for example, would require Paramount’s voting shareholders and non-stockholders to trade at a set price.
The company, led by Bob Bakish, said it would respond to any offers. On the other hand, personnel reductions are progressing, including recent large-scale layoffs. It has also sold non-core assets, including selling Viacom18 to India’s Reliance Group for $517 million.
Representatives for National Amusements, Paramount and Skydance declined to comment. Apollo was not immediately available.
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