Paramount Global Shares Soar 10% on Sony, Apollo Bid Talks

Paramount Global Shares Soar 10% on Sony, Apollo Bid Talks

Shares of Paramount Global soared more than 10% on Friday following reports of discussions between Sony Pictures Entertainment and Apollo Global Management regarding a joint bid to acquire the media giant.

Paramount, known for its iconic Paramount Pictures studios, had been in exclusive deal talks with Skydance Media, an independent studio owned by David Ellison. However, some investors had pushed for Paramount to explore alternative options. This came after private equity firm Apollo had previously made significant bids amounting to $26 billion for the company and an additional $11 billion offer for Paramount’s film studio.

The joint bid with Sony, which is still in the process of being structured, is expected to involve a cash offer for all outstanding Paramount Global shares, leading to the company going private. Sources have revealed that Sony would hold a majority stake in the joint venture and oversee the operations of the media company, leveraging its extensive library of films that include blockbuster franchises like ‘Star Trek,’ ‘Mission: Impossible,’ and ‘Indiana Jones,’ along with popular television characters such as SpongeBob SquarePants.

Additionally, Apollo is likely to take control of the CBS broadcast network and its local television stations as part of the deal. Despite the recent surge in share prices, Paramount shares have faced challenges, experiencing a nearly 7% decline since April 3 when exclusive negotiations with Skydance were reported. The stock closed at $12.44 on Friday, marking a 13% increase and pushing the company’s market cap above $8 billion, though still significantly lower than its January valuation of below $10 billion.

The formation of Paramount Global in 2019 through the merger of CBS and Viacom has seen the company lose over $16 billion in value. Last year, Paramount’s revenue decreased by nearly 2%, reflecting the industry-wide transition from traditional television to streaming platforms. Paramount+, the company’s streaming service, has reported subscriber growth but remains unprofitable.

Looking ahead, Paramount stock has declined by 16% year-to-date, with a majority of analysts issuing a ‘hold’ or lower rating on the stock. The ongoing discussions with Sony and Apollo present a significant opportunity for Paramount Global to realign its strategies and capitalize on the evolving media landscape.

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