Paramount Stock Soars 10% Amid Skydance's $1.75 Billion Love Letter

Awww, the surprising on-again, off-again love story between Skydance Media and Paramount Global (NASDAQ:PARA) looks like it’s back on kids. How nice.

(Source: Giphy) 

Paramount Global is soaring this morning (up 10%) on the news of a preliminary, $1.75 billion deal to combine with Skydance Media. As if these two motion picture conglomerates wanted a sit-com of their own. 

(Source: Wall Street Journal) 

But for the sake of setting the plot, let’s rewind a bit. Skydance Media, the production house behind blockbusters like "Top Gun: Maverick" and the "Mission: Impossible" franchise - has been checking out Paramount Global, which owns CBS, MTV, and a treasure trove of iconic films, for a while. And even though they’ve been in multiple talks before about reaching an agreement…

Last month, it seemed like the dream deal was dead in the water. Talks collapsed, and it looked like Skydance and Paramount were heading for the famous “Just Friends” excuse. Cue the “awww” sign in the audience. 

(Source: Giphy) 

But as of this morning, it looks like they’ve defied the odds and are back at the negotiating table, possibly even stronger than before.

Here are the details: Skydance has come back with a new and improved offer, flashing a cool $1.75 billion to buy National Amusements, which holds a whopping 77% of Paramount’s voting shares. It’s like showing up to your ex’s door with a bouquet of roses and a killer apology speech. 

(Source: Reuters) 

But even though Paramount is definitely swooned, the marriage isn’t set in stone… (yet). According to reports, Paramount’s got a special committee of directors reviewing the deal, and there’s a 45-day “go-shop” period. This means Paramount can still swipe right on other suitors who might offer better relationship terms. Think: A real life Bachelor situation, but instead of ditsy bachelorettes… it’s all dolla bills baby.  

(Source: Imgflip) 

Keep in mind, Skydance is run by David Ellison, son of Oracle co-founder Larry Ellison. He’s been chasing Paramount like the Hollywood heartthrob’s they’ve created over the years, and he’s refusing to take no for an answer. 

(Source: Business Insider) 

On the other side, we’ve got Shari Redstone, daughter of media mogul Sumner Redstone, who’s been calling the shots at National Amusements. She’s seen the potential in this merger from day one, but even she had her reservations when the initial talks fell apart.

So why the sudden change of heart? Well, it’s all about the Benjamins and a bit of strategic maneuvering. The new deal includes stronger protections for National Amusements against potential litigation and a higher valuation. 

(Source: Giphy) 

Paramount is also drowning in $14.6 billion of long-term debt, and this merger could be the lifeline they desperately need. It’s like when you’re drowning in student loans and suddenly find the current President saying they're forgiven (yay!). 

Which is why Paramount stock is unsurprisingly buzzing this morning. Shares shot up 10% in after-hours trading on the news. Champagne anyone? 

(Source: Barrons) 

But still, let’s not get too ahead of ourselves. There’s still a chance this deal could fall apart, just like that couple who keeps breaking up and getting back together. 

Plus with this open-courting “45-Day Shop” period, other big names are in the mix, too. We’re talking Steven Paul, Edgar Bronfman Jr., and Barry Diller, all of whom might slide in Paramount’s DM’s with their own offers. It’s basically the Hollywood version of speed dating, and the clock is ticking.

(Source: Giphy) 

In conclusion, Skydance and Paramount’s merger saga is far from over. This future docu-series drama has all the elements of a blockbuster: high stakes, dramatic twists, and a cast of powerful players. 

And whether they’ll finally seal the deal or call it quits for good remains to be seen. Obviously, the market want’s it to happen… like we all wanted Ross and Rachel to happen. But while it took a little longer then expected (10 strung out seasons) we finally got our happy ending in the end. 

(Source: Giphy) 

Which is why it’s definitely worth keeping Paramount on your watchlist throughout the day…

P.S. For those who haven’t watched Friends yet, sorry for the spoiler… but I legit just saved you 80 hours of time wasting. You’re welcome. 
 

Stocks.News holds no positions in the companies mentioned.