ViacomCBS, which rebranded to Paramount Global (NASDAQ:PARA) earlier this year, hit a dead-end in its plan to sell its book publishing business when a federal judge rejected the deal. Paramount’s Simon & Schuster unit was in talks to be sold to the world’s largest publisher, Penguin Random House, for about $2.18 billion.
The Simon & Schuster-Penguin deal is the latest to fall victim to the increasingly stringent antitrust laws. Notably, Simon & Schuster is one of the five largest publishers in the U.S., and the Justice Department believes that its acquisition by Penguin might hurt writers with other publications by reducing competition.
U.S. District Judge Florence Pan agreed with the Justice Department’s observation and rejected the merger.
Paramount had put the publishing unit up for sale in an attempt to focus better on its streaming-video business. The company’s push to be known primarily as a streaming player became evident when it rebranded itself to better relate to the streaming world.
Is PARA a Good Stock to Buy?
Wells Fargo (NYSE:WFC) analyst Steven Cahall, downgraded PARA stock to a Sell rating yesterday with a $13 price target, citing overvaluation amid uncertainty in its streaming business.
Wall Street is also cautious about PARA stock, with a Hold consensus rating based on four Buys, three Holds, and Seven Sells. The average price target for Paramount stock is $23.31, indicating an upside of 27.24%.
