Paramount (PARA) stock soared Wednesday after the Wall Street Journal reported that a merger between media giant Paramount and Skydance Media was back on the table, trading at around 8.8% in early trading. % rose.
Shari Redstone, who controls Paramount through her family’s National Amusements holding company, ended merger talks with Skydance in June after months of back-and-forth negotiations.
Under the new proposed agreement, Skydance would acquire National Amusements for $1.75 billion and acquire numerous media assets including CBS, BET, Showtime and MTV, as well as its namesake studio business and streaming, according to the magazine. The company will merge with Paramount, which owns the platform. .
The parties also agreed to a 45-day “go-shop period” to allow other potential bidders to submit offers.
Geetha Ranganathan, a senior analyst at Bloomberg Intelligence, said in an interview with Yahoo Finance that there is “a lot of uncertainty” about the new deal, adding that the terms are “not very clear at this point.” added.
But what seems more clear is that Redstone will be protected from the threat of lawsuits from non-voting shareholders. This is the biggest reason why the media mogul called off the deal last month.
“This time, it appears that there is stronger indemnification language in the contract that should or could potentially protect her from many future lawsuits,” Ranganathan said.
But that doesn’t mean things are completely set in stone, especially if history is any indication.
Skydance has previously worked with Paramount on popular film franchises such as “Mission: Impossible,” “Top Gun: Maverick” and “Transformers,” but the company closed after non-voting shareholders raised concerns about the original terms. , reportedly revised the proposal multiple times. The talks would have given Redstone $2 billion in cash as the first step in a deal.
Negotiation confusion has become a major problem for the company as a whole. Amid the drama, Paramount announced in late April the resignation of CEO Bob Bakish, who reportedly clashed with Redstone over the Skydance deal. He was then replaced by an “Office of the CEO” consortium made up of three company department heads.
