The ongoing saga at media giant Paramount (NASDAQ:PARA) has produced its share of twists and turns. Early this morning, we got the latest one: an all-cash deal from the coalition of Sony (NYSE:SONY) and Apollo Global Management (NYSE:APO) that might mean the end of Paramount as a traded stock. But now, Paramount is down over 5% as word emerges that its special committee believes the offer is serious, and that means a threat to the Skydance merger effort.
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The coalition offer is said to be “night and day” different from the one that Apollo put up by itself for Paramount. Sony’s offer includes not only a “significant” premium for class B shareholders, but class A shareholders—including current majority owner Shari Redstone—will land a double premium. Thus, the special committee in charge of such matters at Paramount has adjudged the offer “very serious” and is, therefore, taking it “quite seriously,” reports note.
Skydance Buckling, No Deal at All?
As for the Skydance offer, their window of exclusivity runs out tonight, and reports note that its offer is floundering. There’s a “gap” in those negotiations right now, reports note, and the exclusivity period will not be extended beyond its current limit of tonight at midnight. Insiders reported to Variety that Shari Redstone now concludes, albeit reluctantly, that the Skydance deal is no longer a possibility.
Meanwhile, those same reports suggest that the sheer amount of government involvement that would likely step in on such a merger may render the whole thing moot.
Is Paramount Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on six Buys, eight Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 19% loss in its share price over the past year, the average PARA price target of $13.29 per share implies 1.3% upside potential.
