Paramount Global (NASDAQ:PARA) is seeking bidders for its book publishing house, Simon & Schuster, a WSJ report stated. Private equity player KKR & Co. (NYSE:KKR) and News Corp.’s (NASDAQ:NWSA) HarperCollins are currently the top bidders in the race. This is Paramount’s second attempt to sell off its book publishing unit. The first attempt to sell it to the biggest player in the segment, Penguin Random House, was blocked by regulators last year.
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Paramount hopes to finish the sale by the end of this summer. A second round of bids for the sale is expected in mid-July. Having said that, concerns regarding potential opposition to the sale of Simon & Schuster to a major publishing house due to the deal’s monopolistic implications are possible. The judge’s ruling in the previous case also cited that the formation of a large combined publishing house would hamper authors’ ability to negotiate terms as competition between publishing houses would decline.
In Q1FY23, Simon & Schuster posted revenue growth of 19% and an operating profit increase of 16% compared to the prior-year quarter. A series of hit titles from prominent authors such as Stephen King has kept the boat afloat for Simon & Schuster. According to reports, Penguin Random House holds the largest market share for printed books in the United States, securing the top position, followed by HarperCollins at the second position, and Simon & Schuster at number three.
Is Paramount Stock a Good Buy?
On TipRanks, Paramount stock currently has a Hold consensus rating based on five Buys, five Holds, and seven Sell ratings. Also, the average Paramount Global price target of $19.36 implies 17.1% upside potential from current levels. Meanwhile, PARA stock has lost 1.7% year-to-date.
