• by Wayne Friedman , December 8, 2023

Potential suitors of Paramount Global Skydance and RedBird Capital,  in acquiring controlling shares of the company, have piqued the interest of Wall Street investors.

Mid-day Friday trading of Paramount Global was sharply higher, up 15% to $17.23.

A deal would need to come via National Amusements Inc. (NAI), which is effectively controlled by Paramount Global’s chair, Shari Redstone. NAI has 77% of the voting right share of the company.

A National Amusements Inc. representative had no comment.

Wells Fargo Securities says those shares are currently valued at around $1 billion, but doesn’t effectively equate to a “meaningful control premium”. 

Steven Cahall, media analyst of Wells Fargo, believes the interest on the part of Skydance -- a producer on the Paramount lot -- and investment firm RedBird would be directed to a plan to break up the company, with Skydance keeping Paramount’s studio operations. 

The key piece there is that around $6 billion licensing program fees go through the studio operations.

Parts of the company to be sold, according to Cahall, include its ad-supported streaming platform Pluto TV, valued at around $1.7 billion; and linear TV networks/platforms (including CBS, and cable networks), $16 billion.

“We think the probability of a deal is decent given Skydance is a credible buyer,”  says Cahall, in a note. “Paramount Global recently announced senior executive change of control packages and Ms. Redstone may have grown tired of Wall Street's drumbeat of media negativity and familial intrigue.”