On Tuesday, Loop Capital reiterated a Sell rating on Paramount Global (NASDAQ:PARA), with a steady price target of $8.00. The firm's analysis suggested skepticism about the potential benefits to Paramount Global's shareholders from any dealings involving Barry Diller and National Amusements (NAI), the controlling shareholder of Paramount.
Barry Diller, a veteran in the entertainment industry, has been hinting at an interest in acquiring NAI. His track record of shifting from traditional media to digital platforms has been noted as a strategic move that accumulated his wealth over the years. Despite Diller's extensive experience and his previous assertions that Netflix (NASDAQ:NFLX) has triumphed in the streaming wars, Loop Capital expressed doubts regarding the value addition to Paramount Global from a possible bid for NAI.
The firm highlighted that any bid for NAI would likely serve the interests of the Redstone family rather than the public Class A or Class B shareholders of Paramount Global. With Paramount's projected EBITDA heavily reliant on a diminishing linear business sector, and considering that the bulk of its linear business is in general entertainment, Loop Capital sees little upside for the company's stock.
Loop Capital further noted that the longer it takes for any potential deal to materialize, the less valuable Paramount's assets are likely to be. The firm anticipates that there will be more discussion and rumors about Paramount Global's future at the upcoming Sun Valley conference, a notable event in the media and technology sectors.
In other recent news, Paramount Global continues to be the subject of significant financial developments. Goldman Sachs (NYSE:GS) has initiated coverage on Paramount with a Sell rating and a price target of $9.50 per share. The firm has cited ongoing challenges in the company's traditional cable and broadcast network business, despite advancements in Paramount+ and the theatrical box office.
Paramount Global has also attracted attention due to potential acquisitions and strategic proposals. Skydance Media has revised its bid to acquire a portion of Paramount's non-voting shares, a move supported by a special committee within Paramount's board. Concurrently, financier Steven Paul has proposed a $3 billion offer for National Amusements, Paramount's controlling shareholder, while Edgar Bronfman Jr., in partnership with Bain Capital, is considering a bid estimated between $2 billion and $2.5 billion for National Amusements.
Analysts at Wells Fargo (NYSE:WFC) have maintained an Equal Weight rating on Paramount stock amid these developments. Similarly, Rosenblatt analysts have addressed the ongoing speculation surrounding a potential acquisition of Paramount by Skydance. The proposed merger includes a $23 per share cash offer for Paramount's voting A shares and $15 per share in cash for approximately half of the non-voting B shares.
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