Paramount Global (NASDAQ:PARA), owner of CBS and the Viacom cable networks, is in play after Byron Allen made a public offer to buy it for $14.3 billion. The total offer is worth $30 billion, including the company’s debt.
The news sent PARA stock up 13% in overnight trading. Paramount Global was trading at $15.50 as the market prepared to open this morning. That’s a market capitalization of $10.3 billion.
Succession Gets Serious
Paramount has been negotiating with Skydance Media on a deal to take it private. Skydance is working with KKR (NYSE:KKR) and RedBird Capital Partners to buy National Amusements, which has 77% of PARA’s voting stock.
Skydance is run by David Ellison, son of Oracle (NASDAQ:ORCL) founder Larry Ellison. The elder Ellison is worth $142 billion, according to Forbes. He is reportedly in on the deal.
Shari Redstone is the key to any transaction. She is the controlling shareholder of National Amusements, which has 77% of Paramount’s voting stock. She inherited the stake from her late father, Sumner Redstone, who died in 2020.
Since Shari Redstone took control, the company has lost 13% of its value. Streaming companies like Netflix (NASDAQ:NFLX) and Cloud Czars Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) have disrupted the industry.
Allen Media owns The Weather Channel and other cable networks with international distribution. He is reportedly worth $800 million.
PARA Stock: What Happens Next?
Ellison can easily outbid Allen, who will need to find partners to get a deal done. Allen is publicizing his interest, hoping arbitrageurs looking to cash in on a transaction will buy the stock.
As of this writing, Dana Blankenhorn held LONG positions in AMZN and AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
