PARA - Paramount: What The Skydance Proposal Means For Investors

2024-04-05 19:32:35 ET

Summary

• The potential endgame for Paramount is gaining shape, although some key issues remain unknown.
• We have recently learnt about a (so far rejected) $26B acquisition proposal by Apollo Global Management.
• We also know that David Ellison’s Skydance wants to merge with Paramount and that the company is currently negotiating with him on an exclusive basis.
• Extrapolating from several press reports can help us define more clearly what will probably happen.
• Here is what investors need to focus on.

Shari Redstone is finally willing to sell – but the exact terms matter

Until recently, even the very hypothesis that Shari Redstone might not sell after all was not totally out of the question. Today, it looks pretty certain to me that she will part with the media empire built by her late father. The fact that the stock price of Paramount ( PARA ) ( PARAA ) so far has barely reacted to this increased probability is not so much due to doubts whether she will sell or not – it is rather due to significant uncertainty about the final shape of a sale....

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