Paramount Global’s stock went up 3.9% early Tuesday after it was said that Barry Diller’s IAC is looking into making a bid for the company. This comes after talks between Skydance Media, the parent company of CBS and Nickelodeon, and David Ellison’s company broke down in June.
A report in the New York Times said that IAC (IAC, -2.01%) and Shari Redstone’s National Amusements (Paramount’s PARA, -2.41% controlling shareholder) had signed non-disclosure agreements. This is an important step in the deal-making process because it lets both sides share private information. The report used four sources who knew about the situation.
Talks between Redstone and Skydance ended in June after weeks of tensions that saw Paramount’s CEO and several board directors leave, new bidders come forward and angry shareholders think the deal with Skydance would benefit Redstone at the expense of them. Now IAC is stepping in.
In order to compete with Netflix Inc. and make money from their streaming services, Paramount and other media companies have cut costs, let go of employees, and tried to merge. Some analysts have already named Netflix Inc. the winner of the streaming wars that began more than a decade ago. Since the strikes last year, studios have cut back on making TV shows.
In May, Sony and Apollo Global Management Inc. also made offers for Paramount.
Aside from Paramount, the Wall Street Journal said that former media executive Edgar Bronfman Jr. and Hollywood producer Steven Paul were also interested. Bronfman Jr. would have the support of private equity firm Bain Capital.
The Journal reported that Skydance, the company that made some of Tom Cruise’s “Mission: Impossible” films, wanted to pay about $1.7 billion in cash to buy National Amusements. The Journal said that after that, Skydance and Paramount would have merged through a stock deal. Lawrence Ellison is the co-founder and chief technology officer at Oracle Corp. and the father of David Ellison.
The Times says that the NDAs between Diller and Paramount were signed after the deal with Skydance fell through.
A lot of years ago, Diller tried to buy Paramount Pictures, but Sumner Redstone, Shari’s late father, made a better offer.
After that, Diller worked to make his own media company.
IAC’s stock didn’t move before the market opened, but it’s down 15% so far this year. The S&P 500 SPX has gone up 14.8% so far this year, while Paramount’s stock has gone down 31%.
