Shares of Paramount Global (PARA) rose nearly 8% during early Friday trade after news of Sony Group’s studio department discussing with Apollo Global Management about a potentially joining bid was reported by The New York Times. Despite being in exclusive merger talks with Skydance Media, an official bid is yet to be placed by Sony or Apollo.
Investors have voiced substantial concerns over the potential Skydance deal, and Apollo's original bid of over $26 billion, inclusive of debt, was initially declined by Paramount due to financing concerns of the investment company.
Paramount, which is the parent company of CBS, falls under the command of Shari Redstone, a significant voting stakeholder via Redstone's National Amusements. Redstone, who also dismissed an independent $11 billion bid for Paramount's film studio, took over the family's media empire, National Amusements, in 2019, and merged CBC and Viacom to form Paramount Global.
CBS and its renowned Hollywood studio with treasured franchises like "Star Trek" and "Transformers" are among Paramount's top assets.
Last month, S&P Global Ratings demoted Paramount's rating to "BB+" from "BBB-" attributing it to the media company's substantial debt burden and its difficulty in making streaming profitable. Paramount will need to significantly curtail streaming deficit over the next couple of years to ward off further downgrade pressure, stated S&P in its previous monthly statement.
Paramount has been attracting takeover interest over the past year. Reports of early discussions to form an entertainment powerhouse with Warner Bros. Discovery surfaced in December. Additionally, media entrepreneur Byron Allen is rumored to have proposed $30 billion for the company's outstanding shares and debt earlier this year.
Paramount’s shares rose 7.9% to $11.84 soon after the market opened on Friday. However, despite this uptick, the company's shares have shed nearly 20% since the beginning of 2024.