Paramount’s Second-Largest Shareholder Would Rather See Company Go Unsold Than Approve Skydance Deal
Speaking with the New York Post last week, Wall Street mogul Mario Gabelli said there was “no question” he’d prefer no deal to the Skydance offer.
There aren’t many Paramount shareholders beyond the controlling shareholder Shari Redstone who are enthusiastic about the company’s decision to enter into exclusive negotiations with David Ellison of Skydance Media regarding a merger. A report from the New York Post indicates that Paramount’s second-largest shareholder Mario Gabelli is also against the deal, and in fact would rather Paramount remain unsold than see it be merged or acquired by some other company.
- Gabelli said there was “no question I’d rather see no sale” when queried by the Post.
- His plan is to follow Paramount CEO Bob Bakish’s guidance on keeping the company going, as well as to sell its cable channels to Byron Allen.
- Allen has already registered a bid for Paramount Global, as has the private equity firm Apollo Global Management.
Gabelli owns more shares of Paramount than anyone except for Redstone, whose holding company National Amusements Inc. is in control of nearly 80% of Paramount Global’s voting stock. Gabelli might not have the final say in whether the Skydance deal to buy out Redstone’s stake in National Amusements for around $2 billion becomes reality, but his words carry weight nevertheless.
However, it’s not just the Ellison offer that has drawn Gabelli’s ire. He wants Paramount to spurn all offers currently on the table that would see the entire company change hands, and prefers to follow the plan laid out by current company CEO Bob Bakish for keeping Paramount independent.
“There’s no question I’d rather see no sale,” Gabelli told The Post in an interview last week. “I’m a firm believer in what Bakish is doing and I think he can pull it off and the stock will be worth substantially more.”
If Paramount remains an independent company, Gabelli argues, its stock price could bounce back from the roughly $11 per share that it currently commands, and by 2027 could reach as high as $41. But that’s only possible if Paramount decides to forgo any merger or acquisition opportunities on the table, which does not seem to be Redstone’s preference at the moment.
What Possibilities Remain for Paramount?
If Paramount does remain independent, Bakish will likely continue to follow a strategy of select content removals on Paramount+ to achieve profitability. Indeed, Bakish has said more than once that he expects Paramount+ to be profitable domestically by 2025, and the streamer is rolling out to more and more countries in a bid to expand its global subscriber base. Paramount remaining independent would also lead to more price increases for Paramount+, which Bakish has confirmed are an eventuality for the streamer.
Paramount remaining an independent company could also entail a sale of some of its assets. Notably, Gabelli suggests that the time has come for Paramount to divest itself of some linear TV channels, including CBS, Comedy Central, and MTV to billionaire media mogul Byron Allen of Allen Media Group.
“I’d find a way to let Byron Allen get the TV channels and deleverage,” Gabelli said.
Allen has already made a bid for Paramount Global’s voting stock, which would give him control of those networks and all of Paramount’s other assets. But there has been little discussion surrounding that potential deal for months, suggesting that Paramount executives think there are better options available. Allen has also attempted to pursue the Paramount-owned BET Media Group, but did not make much headway in that regard.
In addition to attempts by Allen and Ellison’s Skydance to acquire Paramount, there is a $26 billion bid from Apollo Global Management on the table as well. Paramount refused to consider that bid before entering into exclusive negotiations with Ellison, much to the consternation of many shareholders who couldn’t understand why it wasn’t even discussed.
The company could circle back to offers by Apollo and Allen if the Skydance deal goes south. Paramount’s ownership situation could take a considerable amount of time to settle; if Paramount does agree to terms with Ellison, it sounds as if it will trigger a litigious response from Gabelli. That could drag out the process of Paramount’s merging with Skydance for an indefinite period.
“If Shari sells voting stock and my clients don’t get [a premium price for their shares], I have no choice but to sue,” he told Reuters last week.
Paramount Plus
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