Paramount Global Inc.'s stock experienced a significant surge of 13% on Friday following reports that David Ellison, chief executive of Skydance, a diversified media company, and investment group RedBird Capital, are contemplating taking control of the company.
According to Deadline, an online entertainment news site, discussions are underway for a potential deal involving National Amusements, the exhibitor based in Norwood, Mass., which currently owns 77% of Paramount's Class A shares with voting rights.
No comment has been provided by RedBird and Skydance in response to Deadline's request. Paramount has also declined to comment on the matter.
David Ellison is the son of billionaire Larry Ellison, co-founder of Oracle. Deadline reveals that while Skydance and RedBird may not be interested in managing Paramount's cable networks or KCBS-TV, gaining access to intellectual property and Paramount Pictures would align with their goals.
National Amusements was established by Michael Redstone, father of the late Sumner Redstone, who served as CEO and president until his passing in August 2020. Shari Redstone, Sumner Redstone's daughter, now holds the position of president at National Amusements and played a key role in driving the merger between CBS and Viacom, which led to the formation of Paramount Global as it stands today.
It has been reported that Shari is open to the possibility of merging or selling the company if the right offer comes along. However, the current high interest rates pose a challenge in the deal-making environment. Paramount has been facing difficulties lately, particularly in its streaming business. Additionally, the traditional broadcast and cable TV sectors are experiencing decline, with a 14% drop in advertising revenue in the TV division during the third quarter compared to the same period last year.
Read now: Paramount's stock experienced a 40% decline since early May, and according to BofA, there might be further room for it to fall.
Paramount's recent stock performance has pushed it into positive territory for the year, showing a gain of 1.2%. In comparison, the S&P 500 has seen a 19% increase.
Don't miss: Expect changes in strategy from major streaming players like Netflix, Disney, and others.
