Sony & Apollo Join Forces in a Bid to Acquire Paramount Global

BATS:PARA   Paramount Global
Sony Pictures Entertainment and Apollo Global Management are currently in talks to explore the possibility of submitting a joint bid to acquire Paramount Global. This information was obtained from an anonymous source who is familiar with the matter. The two companies have not yet approached Paramount ( PARA ), which is currently in exclusive negotiations with Skydance Media, an independent studio headed by David Ellison. Despite this, some investors have encouraged Paramount to consider alternative options.

If the competing bid comes to fruition, it would involve cash payments for all outstanding Paramount shares ( PARA ), and result in the company becoming privately owned. The source revealed that Sony would own a majority stake in the joint venture and would operate the media company, along with its library of films and television shows, such as "Star Trek," "Mission: Impossible," "Indiana Jones," and SpongeBob SquarePants. Sony Pictures Entertainment Chairman, Tony Vinciquerra, a seasoned media executive with significant experience in the film and television industry, would likely be tasked with running the studio, leveraging Sony's marketing and distribution expertise.

Due to restrictions on foreign ownership of broadcast stations, the source stated that Apollo would likely assume control of the CBS broadcast network and its local television stations. Sony's parent corporation is based in Tokyo, Japan.

The New York Times initially reported the ongoing discussions between Sony and Apollo. Both Sony and Paramount have declined to comment on the matter, and Apollo could not be reached for comment.

Previously, Apollo had made an offer of $26 billion to acquire Paramount Global ( PARA ), whose enterprise value at the end of 2023 was estimated to be around $22.5 billion. However, a special committee of Paramount's board elected to continue with its advanced deal talks with Skydance, rather than pursuing a deal "that might not actually come to fruition," according to two people with knowledge of the board's actions.

The committee is currently assessing the feasibility of acquiring the smaller independent studio in a stock deal worth around $4 billion to $5 billion. Skydance is also reportedly in negotiations to acquire National Amusements, a company that holds the Redstone family's controlling interest in Paramount. However, this transaction is contingent upon a Skydance-Paramount merger.

Technical Outlook
Paramount Global ( PARA ) shares quickly responded to the development besieging it surging by 8.3% from a weekly low of $10.03. The stock has a Relative Strength Index (RSI) of 54.24.
Moreover, traders need to be cautious as the stock is trading below the 200 and 100-day Moving Averages (MA) igniting a concern about its bullish trend. The question is will it keep surging? or test a new support level eventually.

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