Paramount Global (FOR) shares soared more than 10% in early trading Wednesday after Bloomberg Media mogul Byron Allen reportedly made a $14.3 billion offer to buy all of Paramount's outstanding shares.
According to the report, Allen offered $28.58 each for the company's voting shares, marking a 50% premium compared to recent trading levels, and $21.53 for non-voting shares. . Including existing debt, the total value of the deal amounts to approximately $30 billion. It is unclear how he would finance the acquisition.
National Amusements (NAI), Paramount's holding company, owns approximately 10% of Paramount's equity value and maintains 77% of the voting shares, valued at around $1 billion. Shari Redstone She currently serves as non-executive president of Paramount Global.
"We believe PARA should accept this deal immediately as it represents a >50% premium to yesterday's close, which is likely an acceptable premium for most PARA shareholders," KeyBanc analyst Brandon Nispel wrote. , in a new note to clients on Wednesday.
According to the report, Allen plans to sell the Paramount movie studio, which has produced top films from "Top Gun: Maverick" and the "Mission Impossible" franchise to the recent children's thriller "Smile" and "Paw Patrol."
It would also sell real estate and some other intellectual property, but would retain the TV channels and the Paramount+ streaming service. It would plan to manage them more profitably, Bloomberg noted.
Wells Fargo analyst Steve Cahall, who recently updated shares at equal weight due to the potential unlocking value of mergers and acquisitions, he added that the Allen deal seems the most likely.
"While investors were initially skeptical about funding Allen's bid, we believe he wants the linear assets and there are plenty of buyers for the studio/content. This increases the likelihood that something will go well, which will keep the stock high," he wrote on Wednesday. "The implication is that the studio/real estate company is financing the deal."
Paramount has become the industry choice number 1 for a breakup or merger due to its small size relative to the competition, which has also meant being ignored by some consumers who only want to pay for a limited number of transmitters.
