Paramount shares skyrocket after reports of potential takeover

Investing

Paramount Global’s stock soared more than 14% on Friday following multiple reports that RedBird Capital and Skydance Media are eyeing a potential takeover of the media conglomerate, one that would be done by taking over voting shares owned by Paramount parent company National Amusements.
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Paramount has reportedly been in talks with Apple about a streaming platform bundle deal that would rival other platforms like Netflix and Max. (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images)

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Key Takeaways
  • Shares of Paramount Global, now up 12.38%, rose as high as $17.24 on Friday, an increase from the $11.82 it traded at one month ago.
  • The surge comes after Thursday reports from Deadline and Puck News indicated RedBird and Skydance were exploring a potential takeover of Paramount Global, which currently has an $11.4 billion market cap.
  • Deadline reported that the chatter around the potential deal was “loose lipped” and that targeting Paramount’s Class A voting shares, 77% of which are owned by National Amusements, could give RedBird and Skydance control of Paramount without having to outright purchase it.
  • Paramount Global’s Class A shares also traded high Friday, rising more than 10% and trading at around $21 per share.
  • Paramount and RedBird didn’t immediately respond to Forbes’ request for comment.
Key Background

Paramount Global’s stock has slid from a string of highs it experienced in the first quarter of the year, peaking at $24.60 per share in late January and reaching a low of $10.70 by October. The company’s streaming platform, Paramount+, hit more than 63 million subscribers globally, according to its third quarter earnings, which also revealed $238 million in direct-to-consumer losses that were well below analyst expectations.

Paramount’s streaming service is in the process of growing amid a saturated streaming market that includes Netflix, Disney+, Hulu and other digital powerhouses. Paramount Global and Apple have discussed a bundle of their respective services at a discount, according to the Wall Street Journal.

The Journal reported that the combination would cost less than subscribing to each service individually, though discussions around such a move are in their early stages. Competitors Netflix and Max recently announced a bundle through a deal with Verizon, giving Verizon’s customers the ability to use both streaming platforms with ads for $10 a month. The bundle saves customers $7 a month for those already using ad-supported plans on Netflix and Max.

This article was first published on forbes.com and all figures are in USD.

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