Apollo Global Management Inc (NYSE:APO) has placed an $11 billion bid to purchase the film and TV studio of Paramount Global (NASDAQ:PARA) (NASDAQ:PARAA), outpacing the company's entire market value of approximately $7.7 billion.
This proposal is part of a broader review by Paramount's independent committee.
It is also considering a merger offer from Skydance Media, aiming to integrate the entirety of Paramount, including its holdings like CBS and Nickelodeon, the Wall Street Journal reports.
Also Read: India's Richest Man Buys Paramount's Entire Stake In His Broadcasting Unit Viacom18 For $570M
Paramount's studio, known for hits like "Top Gun: Maverick" and "A Quiet Place," has attracted interest from various buyers over the years, including Netflix Inc (NASDAQ:NFLX).
However, Paramount Global's primary stakeholder, Shari Redstone, and other board members have previously opposed selling the studio. Redstone, who is open to selling the entire company, faces a crucial decision regarding the potential division of Paramount to facilitate the studio's sale.
The interest in Paramount's studio stems from its extensive content library and the growing demand for new programming in the streaming sector, despite the decline of Paramount's TV networks due to the shrinking cable business.
Simultaneously, Skydance Media, led by David Ellison, has proposed acquiring Paramount's parent company, National Amusements, and merging with Paramount.
Ellison, supported by his father, Larry Ellison, co-founder of Oracle Corp (NYSE:ORCL), is expected to finance the merger.
As Paramount's directors review these offers, their challenge lies in ensuring any deal benefits all shareholders, not just National Amusements.
Amidst these developments, Paramount has explored other strategic options, including merger talks with Warner Bros. Discovery Inc (NASDAQ:WBD) and a potential streaming partnership or joint venture with Comcast Corp (NASDAQ:CMCSA).
The company's stock witnessed a significant rise following the announcement of Apollo's bid, marking a sharp contrast to its prior performance this year.
Shari Redstone, who merged Viacom and CBS in 2019, creating Paramount Global, is at a pivotal juncture, considering the future direction of the media conglomerate her father, Sumner Redstone, built.
Previous reports indicated Paramount Global's downsizing plans across divisions in February, less than initially speculated 800.
The streaming giants, including Walt Disney Co (NYSE:DIS) and Netflix, Inc (NASDAQ:NFLX), battled subscriber loss amidst price hikes and cost-of-living pressures.
Warren Buffet's Berkshire Hathaway significantly decreased its position in Paramount during the period.
The stock lost over 41% in the last 12 months. Investors can gain exposure to the stock via Invesco S&P 500 Equal Weight Communication Services ETF (NYSE:RSPC) and Invesco Leisure And Entertainment ETF (NYSE:PEJ).
Price Actions: PARAA shares are up 2.42% at $24.54 premarket on the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image by viewimage via Shutterstock
