By Shares of Warner Bros. Discovery Inc. and Paramount Global Inc. saw an increase after reports stated that merger discussions between the media giants have come to a standstill.
New Developments
CNBC revealed on Tuesday that Warner had decided to pause its negotiations to acquire Paramount following months of deliberation. The initial reports about the potential merger surfaced back in December through Axios.
Stock Performance
Shares of Warner (WBD) rose by nearly 2% on Tuesday, with Paramount (PARA) also experiencing a 1.4% gain.
Regulatory Hurdles
Warner recently finalized a complex merger with Discovery, sparking doubts from analysts regarding the feasibility of another merger amidst concerns over regulatory approval. This proposed merger would involve uniting TV networks like CBS and CNN along with streaming services such as Max and Paramount+.
Acquisition Interests
Skydance Media, owned by David Ellison, has expressed interest in acquiring some or all of Paramount and its parent company, National Amusements, currently under the leadership of Shari Redstone. The ongoing due diligence process indicates Skydance’s continued pursuit of a possible deal.
Industry Insights
Contrary to rumors, Comcast Corp., the owner of Peacock, has clarified its disinterest in acquiring any assets from Paramount. However, they remain open to exploring a potential streaming joint venture, as reported by the Wall Street Journal.
Financial Considerations
Paramount has established a special committee and enlisted its financial adviser to evaluate potential bids for either a portion or full acquisition of the company.
Stock Performance and Expectations
Warner Bros. Discovery witnessed a 10% decline on Friday post announcing a fourth-quarter loss exceeding expectations. Year-to-date, their stock has plummeted by 14%, with a 44% decrease over the last 12 months.
On the other hand, Paramount’s earnings report is awaited on Wednesday. Their stock has seen an 18% dip this year, with a substantial 47% fall over the past year.
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