Why Paramount Global Shares Are Declining Today

Shares of Paramount Global Inc. PARA are trading lower Tuesday, following news that the company's “Go-Shop” period ended without a successful acquisition bid.

What To Know: Edgar Bronfman Jr., who had previously led a consortium of investors in a bid to acquire Paramount’s parent company, National Amusements, withdrew his proposal. This withdrawal paves the way for the $8.4 billion merger between Paramount and Skydance Media, led by David Ellison, the son of Oracle founder Larry Ellison.

Bronfman initially made a $4.3 billion bid for National Amusements, which was later increased to $6 billion. However, the bid was withdrawn after some of Bronfman’s coalition partners expressed discomfort with sharing their personal information with Paramount’s special committee. As a result, the company’s special committee concluded that the merger with Skydance provides immediate value and potential for future growth in the rapidly evolving media industry.

Recap: Paramount's Merger Journey

The merger between Paramount and Skydance has been in the works for several months, with Paramount's board entering exclusive merger talks with Skydance in April 2024. The two companies announced the deal on July 7, 2024, with Skydance and its investor coalition agreeing to invest $2.4 billion in cash to acquire National Amusements and an additional $4.5 billion in stock and cash for Paramount's publicly traded shares. The merger, which is expected to close in the first half of 2025, is subject to regulatory approvals.

The withdrawal of Bronfman’s offer removes a significant obstacle to the merger; however, the market’s negative reaction is likely due to the uncertainty and the perceived loss of a competitive bid that could have driven up the acquisition price. Despite this, the special committee remains confident that the Skydance deal will deliver long-term value to shareholders.

PARA Price Action: Paramount shares were down by 5.96% at $10.66 according to Benzinga Pro.

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