Shares of Paramount Skydance (PSKY) gained 10.7% on April 7, after the David Ellison-led company confirmed backing from Middle East sovereign wealth funds for the Warner Bros. Discovery (WBD) deal. In an 8-K filing, PSKY noted that Saudi Arabia’s Public Investment Fund (PIF), Qatar Investment Authority (via an affiliate), and Abu Dhabi’s L’imad Holding Co. have joined as equity syndication partners. While exact stakes remain undisclosed, earlier reports note their combined commitment at $24 billion, with PIF taking a roughly $10 billion stake.
Claim 30% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
The company noted that their agreement marks “an important milestone in the WBD transaction process, and that the resulting diversification of its shareholder base, the potential for strategic and commercial opportunities with the various Equity Syndication Parties, and the value of the Warrants described below, enhance long-term shareholder value.”
Paramount Accelerates WBD Deal
Paramount has agreed to buy WBD for a massive $111 billion. It would combine Paramount’s assets like CBS News, Paramount Pictures, and Paramount+ with WBD’s HBO, Warner Bros. Pictures, CNN, TNT, TBS, and more. The deal is pending approval from WBD shareholders and regulators.
Paramount’s 8-K filing identifies the equity syndication parties as affiliates of the Ellison family, including David Ellison and his father, Larry Ellison, alongside RedBird Capital Partners. The filing also stated that warrants issued to syndication investors, which allow them to buy PSKY stock, support the company’s goal of expanding its public float over time. The PSKY shares for these investors are “non-voting.”
The Ellison family and RedBird Capital will retain the largest equity stake and own all voting Class A Common Stock (100% of votes). Thus, executives do not anticipate any review from the Committee on Foreign Investment in the U.S. (CFIUS) or Federal Communications Commission (FCC).
Is PSKY a Good Investment?
On TipRanks, PSKY has a Moderate Sell consensus rating based on five Holds and five Sell ratings. The average Paramount Skydance price target of $11.38 implies 4.4% upside potential from current levels. Year-to-date, PSKY shares have dropped 18.2%.
