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M&A News: Skydance Isn’t Giving Up on Paramount (NASDAQ:PARA) Yet
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M&A News: Skydance Isn’t Giving Up on Paramount (NASDAQ:PARA) Yet

Story Highlights

Paramount’s deal is heating up, as Skydance isn’t calling it quits even as Sony and Apollo make their cases.

Free APO Analysis

The action is heating up around the Paramount (NASDAQ:PARA) merger deal, even though we have no idea as yet to whom the media company will go. Sony (NYSE:SONY) and Apollo Global Management (NYSE:APO) are fully in the hunt, with talks now in progress. But Skydance Media isn’t out of the picture just yet, and reports suggest it’s looking to pull in more support. All this has left Paramount looking a little tarnished, as shares are down over 3% in Tuesday afternoon’s trading.

The latest word says that Paramount is now talking to Sony and Apollo and once again to Skydance. You’ll remember that, back during the exclusivity period, Skydance and Paramount were somewhat close to a deal but couldn’t quite close the gap. This was despite outcry from investors who believed that they were being largely ignored in favor of Skydance’s strategy, which seemed to be “court Shari Redstone at all costs.”

But now, Sony and Apollo have a space at the table, and a $26 billion all-cash offer is still in play, even as some wonder if any deal can go down without regulators intervening.

Hollywood Seems to Be Against Consolidation.

Skydance, meanwhile, is not taking this lying down and is turning its attention to Hollywood’s A-list companies in a bid to draw more support for its play. Skydance recently got a note of support from James Cameron, though notes from Taylor Sheridan and Tom Cruise were much tougher to come by. But Skydance may have more support than it realizes; the prevailing opinion in Hollywood right now seems to be against consolidation.

More studios mean more sources to sell content to, and with the streaming market somewhat in decline, there are fewer places writing checks for that next movie or series to consider. A Sony-Apollo-Paramount deal might contribute to this problem.

Is Paramount a Buy or Sell Stock?

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 23.16% loss in its share price over the past year, the average PARA price target of $13.29 per share implies 3.02% upside potential.

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