Media tycoon Byron Allen has made yet another multi-billion dollar takeover offer, this time bidding $14.3 billion to purchase all outstanding shares of mass media giant Paramount Global. Allen proposed $28.58 per voting share of Paramount, representing a substantial 50% premium on recent trading prices, and $21.53 per non-voting share. With existing debt included, the total value rises to approximately $30 billion.
It remains unclear how exactly Allen plans to finance this ambitious acquisition attempt. In recent months he has also sought funding to place bids for several TV stations from E.W. Scripps Co. and last year floated a $10 billion offer to Walt Disney Co. for its ABC network along with FX and National Geographic channels.
The market reacted with some skepticism, as Paramount’s non-voting shares spiked 22% in pre-market trading on Wednesday to $16.70, still notably below Allen’s proposed price.
Allen Media Group confirmed the veracity of the offer in a statement, saying: “This $30 billion offer, which includes debt and equity, is the best solution for all of the Paramount Global shareholders, and the bid should be taken seriously and pursued.”
Paramount, owner of major brands like CBS, Nickelodeon and Paramount Pictures, would likely prove an extremely ambitious acquisition target. The media titan generated operating income before depreciation and amortization of $1.87 billion in the first three quarters of 2022, a concerning 30% year-over-year decline. Revenues were flat at $22 billion. Taking on significant debt to purchase Paramount amid rising interest rates could carry substantial risk.
According to reports, Allen’s proposal involves selling Paramount’s film studio, real estate and some intellectual property to finance keeping the TV channels and streaming service Paramount+ and running them more efficiently. Allen supposedly has both financing partners and interested investors on board as well.
The offer was directly communicated to Paramount’s senior management and board members via email and text message.
Allen has spent over $1 billion in recent years snapping up media assets like The Weather Channel and an array of local TV stations, with the intent of folding them into a combined entity with Paramount if successful. His current station portfolio falls below Federal ownership limits, potentially easing regulatory approvals.
This is not Allen’s first pass at Paramount, having bid $3.5 billion last year for channels like BET and VH1. He also famously texted Disney CEO Bob Iger a $10 billion offer for ABC and other Disney owned networks back in September, though Iger has since affirmed he does not wish to sell.
Paramount has been the subject of intensifying acquisition speculation for many months since producer David Ellison began circling with an initial buyout proposal for the controlling Redstone family’s shares in 2022. Several high profile suitors beyond Allen have been linked to potential deals.
With his broadcasting experience and track record for aggressively pursuing media deals, Allen clearly sees an opportunity to consolidate assets and optimize operations at Paramount Global. But pulling off such an astronomically valued purchase while the market remains wary could still prove an immense challenge. One thing is for certain – Allen’s epic $14.3 billion ambition has jolted Paramount into the media spotlight yet again.