Paramount Global (PARA) shares surged in early trading today as media mogul Byron Allen made a bold move to acquire the streaming and entertainment group in a potential $30 billion takeover bid. Allen, a former TV personality in the 1970s who has since built a multi-billion-dollar media empire, is reportedly eyeing Paramount as part of his ongoing expansion strategy.
Rumors of Paramount’s potential merger with Apple’s streaming services have already contributed to a 30% rise in the company’s shares over the past three months. These talks are part of a broader trend in the streaming industry as companies seek to win back customers following recent price hikes and increased competition.
However, Paramount had previously cautioned investors about a decline in ad sales and intensifying competition, which would impact their fourth-quarter earnings. The company posted weaker-than-expected profits of $6.92 billion for the three months ended in October.
Byron Allen’s Allen Media Group has reportedly offered $28.58 per voting share and $21.53 per non-voting Class B share, valuing Paramount’s equity at $14.3 billion. This potential deal has caught the attention of KeyBanc Capital Markets analyst Brandon Nispel, who believes that Paramount should seriously consider the offer as it represents a significant premium for shareholders.
While Allen’s bid may face resistance from Paramount’s controlling shareholder, Shari Redstone, Nispel suggests that a counteroffer from Warner Bros. Discovery could spark a bidding war for the company. However, he also cautions that a share-based deal could present challenges for Paramount due to the potential variability of equity value and regulatory uncertainty.
As news of the potential takeover spread, Paramount’s shares rose by 12% in early trading, reaching $15.23 per share.
The acquisition of Paramount by Byron Allen would mark another significant milestone in his media empire, which already includes ownership of the Weather Channel. In September, Allen reportedly made a bid of around $10 billion to acquire Disney’s ABC television network and other linear cable assets.
Overall, the proposed deal highlights the growing consolidation and competition within the streaming and entertainment industry. As companies vie for market share and seek synergies to boost their streaming platforms, stakeholders will be watching closely to see how the situation unfolds.
