Paramount Global’s stock jumped more than 12% in Friday morning trading amid reports of a possible takeover bid for the media company.
Multiple reports have said that Skydance Media and RedBird Capital Partners have been kicking the tires on Paramount, which is controlled by Shari Redstone and the Redstone family holding company National Amusements.
National Amusement’s controlling shares in Paramount are worth about $1 billion, according to Wells Fargo analyst Steven Cahall.
“We see a decent possibility a deal gets done,” said Cahall, who expects new ownership to begin divesting parts of the company.
Paramount stock has been under pressure because of its shrinking broadcast and cable networks and its lack of scale in the streaming business.
Cahall said he doesn’t think strategic buyers like Warner Bros. Discovery or Comcast would be interested in Paramount as a whole.
But Skydance or RedBird might try to create value by selling Pluto TV, which could fetch $1.7 billion or its linear networks, worth about $16 billion. They might also shut down the streaming service Paramount Plus, according to Cahall.
“Over the years we've witnessed Skydance grow from a co-producer on the Paramount lot focused on sci-fi/action to a diversified studio incl. animation, sports and a portfolio of big-budget films and original series. We think founder David Ellison has the gravitas to court NAI alongside the deal-making expertise of Redbird,” Cahall said.
Cahall said making a deal will be up to Redstone, whose father media mogul Sumner Redstone built the company.
“We think the probability of a deal is decent given Skydance is a credible buyer, Paramount recently announced senior exec change of control packages and Ms. Redstone may have grown tired of Wall Street's drumbeat of media negativity and familial intrigue,” Cahall said.
None of the companies involved have commented.
