Media entrepreneur Byron Allen, backed by Allen Media Group and undisclosed strategic partners, submits a $30 billion bid to acquire Paramount Global, encompassing outstanding stock and existing debt. Allen Media Group states that Mr. Byron Allen presented the bid on behalf of the group and its partners, emphasizing the belief that the $30 billion offer, inclusive of debt and equity, represents the optimal solution for Paramount Global shareholders, urging serious consideration and pursuit of the bid.
Paramount Global Financial Landscape and Industry Challenges
As of Tuesday, Paramount Global’s market cap stood at $9.13 billion, with the company’s debt load exceeding $15 billion. The rise of streaming and the gradual decline of linear broadcast and cable assets, once major profit sources for legacy Hollywood studios, have posed challenges for Paramount, mirroring the struggles of other traditional media giants.
Paramount has actively divested assets in recent years, including the 2022 sale of publishing group Simon & Schuster and the disposal of its MMA league Bellator late last year. Byron Allen had previously presented a $3.5 billion bid for Paramount’s BET Networks and VH1 cablers. Paramount, despite reportedly receiving offers for BET, has not yet accepted any, as it discreetly explored the sale of some of its larger cable properties.
An uphill climb is anticipated for Allen Media Group in its quest for the renowned studio. Months of M&A speculation have surrounded the company, with Skydance Media, led by David Ellison, actively pursuing a deal to gain control of Paramount Global. This involves acquiring the preferred voting shares owned by controlling shareholder Shari Redstone through holding company National Amusements Inc. Informal discussions about a possible combination with Warner Bros. Discovery have also taken place, although recent weeks have seen a cooling of those rumours.
Byron Allen’s Offer Pressures Paramount Global and National Amusements to Address Rumours
The public statement from Allen Media Group regarding its offer may compel Paramount Global and National Amusements to publicly respond to the ongoing rumours surrounding a potential transaction. This move could also prompt prospective suitors for the entertainment conglomerate to take decisive action. Paramount Global and NAI have refrained from making specific public statements about the Skydance talks or WB Discovery’s approach. Last week, Paramount Global CEO Bob Bakish acknowledged market speculation in a memo to employees, emphasizing the importance of focus amid uncertainty about the company’s future.
Paramount Global’s significant assets include Paramount Pictures, Paramount+ with Showtime streaming service, CBS, Nickelodeon, MTV, VH1, Comedy Central, BET Networks, and international broadcasters like the U.K.’s Channel 5 and Argentina’s Telefe. The stock price for Paramount Global closed at $13.68 on Tuesday, marking a 7-cent decrease. Meanwhile, privately held Allen Media Group owns the Weather Channel, 27 local TV stations in small and medium-sized markets, and lesser-known themed cable channels such as Cars.TV, ComedyTV, JusticeTV, and PetsTV.