M&A News: Paramount’s (NASDAQ:PARA) Skydance Deal Killed for Unexpected Reasons
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M&A News: Paramount’s (NASDAQ:PARA) Skydance Deal Killed for Unexpected Reasons

Story Highlights

Paramount’s latest deal died of unexpected causes, noted recent  reports. And that leaves Paramount’s future looking uncertain.

While most folks, when considering the latest round of Paramount (NASDAQ:PARA) drama, looked to Shari Redstone and National Amusements for a cause, it turns out that they may have had less to do with the deal’s death than some might have expected. In fact, a somewhat unexpected cause has emerged, and that twist sent shares of the media company down modestly in the closing minutes of Friday’s trading session.

The unexpected cause comes from a somewhat familiar source: Mario Gabelli. Gabelli was poised to sue Paramount if the $8 billion deal with Skydance went through. While there were signs that the Paramount committee (designed to approve such deals) was about to vote on letting the deal go through, Gabelli dropped a bombshell that, if it did, he would sue for $100 million or better.

Since Gabelli owns the second most voting shares outside of Redstone herself, it’s easy to see why most any deal focused on National Amusements would rankle.

Sale Plans Leaving Difficulties in Their Wake

The sale plans are leaving some difficulties in their wake, especially now that we’re no closer to an actual deal than we were at the start of the whole process. In fact, Paramount just lost its chief digital advertising officer, David Lawenda, one of the latest departures from the ad sales department. Reasons for the departure, meanwhile, were kept somewhat quiet, but advertising president John Halley expressed confidence in the sales team’s ability to carry on.

Now, with a deal starting to look unlikely, perennial deal-killer Shari Redstone is likely going to have to chart a new future for Paramount on her own. And considering what we’ve heard so far, that’s likely to mean a pared-down Paramount with less content, less star power, and less money.

Is Paramount Global a Buy or Sell?

Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on two Buys, seven Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. After a 37.39% loss in its share price over the past year, the average PARA price target of $11.90 per share implies 17.01% upside potential.


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