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M&A News: Shari Redstone Unhappy with Paramount (NASDAQ:PARA) Deal, Reopens Bidding
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M&A News: Shari Redstone Unhappy with Paramount (NASDAQ:PARA) Deal, Reopens Bidding

Story Highlights

Paramount’s Skydance deal may not be as done as expected, but Sony may not want to come back to the table.

It may have seemed that a deal was finally reached. But new reports suggest that Paramount (NASDAQ:PARA) may not be sold just yet. The news isn’t sitting well with investors, as Paramount shares lost nearly 2% in Wednesday afternoon’s trading after former suitors came back to make their case. This time around, it’s Shari Redstone that’s the problem.

While the original Skydance offer proved a solid one, the revised one shorted her somewhat in exchange for getting more cash to literally every other shareholder that isn’t her. Thus, Redstone is opening the floor back up to other bidders, probably looking particularly at Sony (NYSE:SONY) and Apollo Global Management (NYSE:APO).

Perhaps even Byron Allen will be willing to follow up on his original offer, made back in January. There’s also the matter of producer Steven Paul’s offer to consider here. As a result, Paramount ultimately rescheduled a planned town hall meeting with employees to June 25 to compile the latest information.

Sony Investors Aren’t Interested in Paramount

Interestingly, Sony’s shares actually rose around 3% in Tuesday’s trading after it looked like the deal between Paramount and Skydance was going to go through after all. Sony investors, as it turns out, were getting concerned about Sony’s plans to shell out as much as $26 billion (together with Apollo) for the studio. At the time, that would have represented better than a 10% premium, as Paramount’s enterprise value was well under $26 billion. While there were other reasons—some investors even wondered if Paramount was the right acquisition target to begin with—it was certainly part of the problem for Sony.

What Is the Projection for Paramount Stock?

Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on two Buys, eight Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 22.64% loss in its share price over the past year, the average PARA price target of $12.50 per share implies 3.52% upside potential.

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