Key Takeaway
- Paramount Global shares tumbled Monday as investor Matrix Asset Advisors called on the entertainment giant’s board not to accept what it called a “sub-optimal” takeover bid by Skydance Media.
- Matrix said in a letter to the board that a potential deal being worked out by controlling shareholder Shari Redstone was detrimental to the company’s value and to other investors.
- Matrix called on the board to revisit an offer from Apollo Management Group.
Paramount Global (PARA) shares declined after investor Matrix Asset Advisors raised concerns about the bid by David Ellison’s Skydance Media to take over the entertainment giant.
In a letter to Paramount’s board seen by Investopedia, Matrix wrote that a potential deal between controlling shareholder Shari Redstone and Skydance would be “detrimental” to the company’s value.
It advised members not to accept what it called a “sub-optimal” offer from Skydance, and instead insisted the company revisit a proposal from private equity firm Apollo Management Group. Matrix added that it was “especially galling” that the Apollo offer was not seriously considered.
Last week, the New York Times reported that the media giant was considering making its sale negotiations exclusive with Skydance. The Times also reported last week Apollo, which had initially offered $11 billion for Paramount’s movie studio, later said it would buy the entire company for more than $26 billion.
Matrix complained that the rumored acquisition would simply benefit the interest of one shareholder (Redstone) over all the others. Matrix noted it holds 355,445 shares.
The firm also praised moves by the current leaders to boost Paramount’s financial picture, saying “we implore the Board to support management’s efforts in realizing the company’s full value.”
Paramount shares fell 7.6% to finish Monday’s session at $11.06. Paramount’s stock has lost a quarter of its value since the start of the year.