Benzinga - by Chris Katje, Benzinga Staff Writer.
Paramount Global (NASDAQ:PARA)(NASDAQ:PARAA) shares jumped Thursday and are trading higher Friday as a $26 billion bid from Sony Group Corp (NYSE:SONY) and Apollo Global Management (NYSE:APO) is now being considered by a special committee.
Meanwhile, Skydance Media is holding exclusive talks with Paramount on a merger. The exclusivity period has ended and will not be renewed after it expires on Friday, according to CNBC's David Faber.
Skydance, led by David Ellison, is reportedly ready to walk away from the talks if Paramount’s controlling shareholder, Shari Redstone, doesn't respond to the offer.
Redstone's National Amusements owns around 77% voting shares of Paramount, making her the sole decision-maker on any deal regarding a sale or merger.
Related Link: Paramount Could Be Worth $4 Or $14 Per Share In Deal, Analyst Says: ‘We Prefer To Sit This One Out’
If Paramount goes with Sony and Apollo, it would mean a larger premium for shareholders in the all-cash deal. And Sony would be the majority owner of the company with Apollo obtaining a minority stake.
The Skydance deal includes capital from the company and Redstone, and would likely mean less paid to shareholders and could see shareholders getting diluted and receiving a stake in the merged media company.
Paramount shareholder Matrix Asset Advisors has been vocal in opposing the deal with Skydance.
"Fire sale to Skydance makes no sense. It only benefits Shari Redstone with enormous dilutive impact on shareholders," Matrix Asset Advisors President and Chief Investment Officer David Katz told Benzinga recently.
Katz also said there is no advantage to holding exclusive talks with Skydance.
"Current quarter should make Paramount more attractive to Sony/Apollo," Katz said after the first-quarter results from Paramount.
Paramount announced that CEO Bob Bakish is stepping down earlier this week alongside its quarterly financial results.
"Bakish is being removed (fired) because: He was fighting for all shareholders rather than for doing a one-sided deal Shari at the expense of the other 90% of the shareholders," Katz said of the move.
Paramount shares could continue to be volatile on Friday and into next week as the exclusive talks with Skydance end.
PARA Price Action: Paramount shares are up 3% to $14.33 Friday versus a 52-week trading range of $10.12 to $24.00. Paramount shares are down 38% over the last year.
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