Paramount Stock Soars on Takeover Rumors

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Paramount shares are on the rise following unconfirmed reports of a potential takeover by Skydance Media and RedBird Capital, according to media sources. On Friday, the stock saw a 15% increase in trading, with speculations originating from outlets like Puck and Deadline in Thursday’s reports.

National Amusements, a privately-held motion picture company led by Shari Redstone as its president and Paramount’s chair, possesses around 10% of the media giant’s equity capital value. However, they hold an overwhelming 77% of the voting rights, as explained by Wells Fargo analysts.

Looking forward, Wells Fargo analysts led by Steven Cahall released a report titled “Mission Possible,” in a playful nod to the long-standing Paramount movie series, “Mission Impossible,” starring Tom Cruise. In this report, the analysts express a positive outlook, stating, “We see a decent probability of a deal being reached with significant divestitures and improvements.” They have assigned the stock an Underweight rating with a price target of $12.

Potential Changes on the Horizon for Paramount Studios

Wells Fargo, a prominent financial institution, has expressed the belief that potential buyers of Paramount Studios may not be interested in acquiring the company as a whole. Instead, they may prefer to focus solely on its valuable studios. However, Wells Fargo speculates that if Skydance/Redbird were to be successful in their bid, they might take a different approach and retain what they desire while divesting the remaining assets. This significant shift in strategy could potentially alter the future prospects of Paramount Studios.

Ultimately, the deal under consideration largely depends on discussions between Redstone, the current owner of Paramount Studios, and the prospective buyers. The analysts emphasize that this decision is a personal one for Redstone. They must consider their interest in preserving PARA or divesting it to a new generation of media moguls. Despite potential challenges, Wells Fargo believes there is a decent likelihood of a deal materializing, especially considering Skydance’s credibility as a buyer, the recent announcement of senior executive change of control packages at PARA, and the possibility that Ms. Redstone may be growing weary of the media’s negative portrayal and familial drama.

In conclusion, Paramount Studios may be on the cusp of significant changes as discussions regarding its future take place between Redstone and potential buyers. These alterations could mark a turning point for the company and its trajectory in the highly competitive media industry.

Paramount and National Amusement Decline Comment, Skydance and RedBird to Respond

Paramount and National Amusement, along with Skydance and RedBird, have refrained from providing any comment regarding recent developments. It is worth noting that requests for comment have been made to all the respective parties involved.

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