With entertainment giant Paramount (PARA) considering the merger deal offered by a coalition of investors led by Seagram heir Edgar Bronfman Jr., new reports are emerging surrounding his overall plans for the company, should he come out ahead. Those reports aren’t sitting well with investors, and shares are down fractionally in Monday afternoon’s trading.
One of the biggest plans Bronfman has for Paramount, noted unnamed sources “familiar with his thinking,” according to a Bloomberg report, is to make better allegiances with major technology firms. No one really understands streaming and its potential yet, the report noted, so Bronfman wants to bring in major names to help spark customer retention rates and advertising sales.
Specifics about those plans are being held close to the vest for now, but Paramount may see itself aligned with the likes of Apple (AAPL) or Amazon (AMZN) in the near term. Bronfman is also said to be looking for an alliance that can help it license its various brands for more consumer products.
Redstone Not Out?
One of the odder developments surrounding the Bronfman deal is that Shari Redstone may not be out altogether as a result. In fact, one report emerged suggesting that Redstone may have a role in a post-Bronfman deal environment.
CNBC reports note that one of the people involved in Bronfman’s coalition is Jon Miller, former CEO of AOL, who has long been an ally of Redstone’s. This, in turn, suggests she may have close friends in the Bronfman deal and may be more likely to keep her around after it goes through. It also suggests that Miller himself is gunning for a board seat and perhaps an operations-level job in the new company itself, as he’s working to keep Redstone in the fold and helping Bronfman land access to capital.
Is Paramount a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PARA stock based on three Buys, seven Holds, and 10 Sells assigned in the past three months, as indicated by the graphic below. After a 21.79% loss in its share price over the past year, the average PARA price target of $12.07 per share implies 6.53% upside potential.
