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M&A News: Paramount (NASDAQ:PARA) Slips as NDAs Get Involved
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M&A News: Paramount (NASDAQ:PARA) Slips as NDAs Get Involved

Story Highlights

Paramount sets up new NDAs with Sony and Apollo, suggesting a deal may be in the making after all.

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It’s another new step closer to a deal for media company Paramount (NASDAQ:PARA), as it, along with Sony (NYSE:SONY) and Apollo Global Management (NYSE:APO), have all signed non-disclosure agreements. The move didn’t sit well with investors, who sent shares down fractionally in Monday afternoon’s trading.

The trio have entered into non-disclosure agreements, which is basically the next step toward making a deal. The agreement allows Sony and Apollo to find out more about Paramount, which could ultimately produce a deal. With the Skydance Media attempt to make a deal only about two weeks old now, the fact that Sony and Apollo are moving on to NDAs certainly makes it look like there’s some interest.

However, it’s worth pointing out that Skydance and Paramount had similar measures, only for no deal to come out of that effort.

Is It Still a Deal?

There are signs that the deal with Sony may have already changed. Reports suggest that, now, the original $26 billion deal is off the table in favor of a smaller deal for pieces of Paramount. For instance, it’s clear Sony has its eye on Paramount’s studio business, which comes with a whole slug of intellectual property that produces to this very minute. Meanwhile, Apollo probably likes that massive chunk of real estate that’s involved.

Yet, there’s the thorny issue of Paramount’s linear television properties; Apollo already owns quite a bit of that and would have some regulatory troubles if it tried to buy Paramount’s as well. And with linear television visibly dying anyway, it may not particularly care about that offering to begin with.

Is Paramount a Buy or Sell Stock?

Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on three Buys, 10 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. After an 18.71% loss in its share price over the past year, the average PARA price target of $12.64 per share implies 5.47% upside potential.

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