The battle for media and entertainment conglomerate Paramount Global (NASDAQ:PARA) is heating up. According to a Bloomberg report, media mogul Byron Allen has made a $14.3 billion bid for Paramount, offering to buy all of the company’s outstanding shares. Shares of Paramount soared by more than 20% in pre-market trading following the news.
Bloomberg stated that Allen has offered $28.58 for each voting share of Paramount, which is at a premium of more than 50% to PARA’s closing stock price of $13.68 on January 30. In addition, Allen is offering $21.53 for the company’s non-voting shares. Including Paramount’s debt, it would raise the deal’s total value to around $30 billion.
If the deal comes through, the media mogul plans to sell Paramount’s film studio, real estate, and some of its intellectual property. Allen intends to retain PARA’s television channels along with its streaming service, Paramount+, and plans to run them more cost-efficiently.
Last week, there were reports that David Ellison, Founder and CEO of Skydance Media, could be exploring a deal to take Paramount private. The buzz about the sale of Paramount has become stronger in recent weeks as Shari Redstone is considering selling National Amusements, which controls 77% of Paramount’s voting stock.
Is PARA a Buy or Sell?
Analysts are bearish about PARA with a Moderate Sell consensus rating based on four Buys, five Holds, and nine Sells. Over the past year, PARA has declined by more than 35% and the average PARA price target of $14.35 implies an upside potential of 4.9% at current levels.
