Paramount Global saw a brief spike in its share price after a potential buyer sweetened its deal to buy the company.
The stock price of the New York-based owner of Paramount Studios in Hollywood went up by more than 7% from a close of $11.91 on May 31 to a close of $12.80 on June 3.
Its shares then dropped by 4.4% to close at $12.24 on June 4 and then fell a further 1.3% to close at $12.08 on June 5.
The stock closed at $11.97 on June 6.
The increase came after media reports about Skydance Media, in Santa Monica, upping its offer to buy Paramount Global from its owner, National Amusements and its primary shareholder Shari Redstone.
Paramount Global owns CBS, MTV, Nickelodeon and Paramount Pictures, among other media assets.
A report in the Wall Street Journal said the deal is more favorable than previous offerings to both Paramount’s voting and nonvoting shareholders, citing people familiar with the situation.
Skydance was founded in 2010 by David Ellison, the son of software firm Oracle Corp. co-founder Larry Ellison. His company has been in talks with Paramount for several months, the Journal reported.
Skydance has revised its offer a few times to make it more attractive to shareholders, the Journal’s story said.
The company also agreed to put more money into Paramount. Under the previous offer, it had proposed putting $3 billion in cash into the company and for shareholders, the story added.
The new offer comes less than a month after Skydance’s exclusive negotiating window expired without a deal being reached. Since then, Paramount board members have been considering a rival $26-billion bid from Sony Pictures Entertainment and Apollo Global Management, but those talks have been slow, people knowledgeable with the deal told the Los Angeles Times.
Beyond Skydance, Sony and Apollo, other companies have expressed interest in Paramount in the past few months, including Warner Bros. Discovery, with major operations in Burbank, and Century City-based Allen Media Group, owned by media executive Byron Allen.
Robert Fishman, a senior analyst for MoffettNathanson, said in a June 4 interview with Yahoo Finance, that it will be up to Redstone to pull the trigger on the deal with Skydance.
“But I do think, based on what has been publicly reported, that (Shari) is aligned with the Ellison vision and Skydance vision in terms of what they want to do with the company,” Fishman said during the interview, adding that “it does seem more likely than not that the Skydance deal would go forward.”
But Reuters reported on June 4, that Redstone was unhappy with Ellison reducing the valuation of the deal to $4.75 billion from $5 billion and cutting back the amount he would pay for National Amusements.
On May 31, the Wall Street Journal reported that there were at least two other investor groups interested in bidding for all or part of National Amusements.
“Steven Paul, a Hollywood producer, has been lining up financing to make an offer for National Amusements of around $3 billion, people familiar with the matter said,” the Journal reported. “At least one other investor group has expressed interest in buying National Amusements, they said.”
