Viacom (NASDAQ:VIA) Exploring Sale Of Paramount Pictures
$VIA, $CBS, $BABA, $AMZN, $AAPL, $LGF
Viacom Inc., (NASDAQ:VIA) is under fire over its declining stock price. And the company is exploring the sale of a stake in Paramount Pictures after being approached by potential investors.
The company has hired PJT Partners to help with discussions toward a possible transaction, CEO Philippe Dauman said Tuesday. Viacom aims to reach an agreement by the end of June, he said.
“Pursuing a transaction with someone who would take a minority equity interest would be of great benefit strategically and financially to Paramount and Viacom,” CEO Dauman said at the Jefferies Group LLC conference.
Viacom’s stock has been in decline as the company struggles to boost box office returns at Paramount and TV ratings in the cable unit, which owns MTV and Comedy Central.
Paramount ranked last among the 6 largest film studios in Y 2015, with its US market share under 6%, less than 33% of leader Universal Studios. In its F-Q-1, which ended in December, the company did not have hits to match the prior year’s blockbuster “Teenage Mutant Ninja Turtles.”
The studio could be worth more than $10-B, a Stifel Financial Corp analyst said in a research note after Mr. Dauman’s announcement Tuesday.
Investors in a minority stake are likely to be from China, given the country’s global entertainment ambitions, or from India,. “We would not expect any domestic or European suitors,” he said.
China’s Wang Jianlin’s Dalian Wanda Group Co. has shown interest in US film production, agreeing earlier this year to acquire “Jurassic World” producer Legendary Entertainment for $3.5-B. Jack Ma’s Alibaba Group Holding Ltd. (NYSE:BABA) invested in Paramount’s “Mission: Impossible- Rogue Nation.”
Other companies, such as Apple Inc. (NASDAQ:AAPL) and Amazon.com Inc.(NASDAQ:AMN), could be interested in a full takeover of Paramount.
John Malone, who has pushed for media industry consolidation, could orchestrate a deal via Lions Gate Entertainment Corp.(NYSE:LGF), they added.
Mr. Dauman, who became Viacom Chairman this month when Sumner Redstone, 92 anni, stepped down, told analysts this month that Paramount was entering a rebuilding process with its pipeline of movies improving. Viacom will release 15 movies this year, including a new “Star Trek” film.
Sales of major film studios are rare.
Paramount was acquired by Viacom for $10-B in Y 1994. The company, then called Paramount Communications, had other assets such as Madison Square Garden and the New York Knicks basketball team, which were later sold.
The studio, founded in Y 1912 as the Famous Players Film Company, has released films such as “The Godfather,” “Beverly Hills Cop” and the Indiana Jones series. After leading all studios in market share in 2011, CEO Brad Grey reduced the studio’s output in recent years, releasing fewer movies than other major studios.
Paramount revived its TV studio in Y 2013, dormant since Paramount TV was folded into CBS (NYSE:CBS) when Mr. Redstone split Viacom and CBS in Y 2006.
| Symbol | Last Trade | Date | Change | Open | High | Low | Volume |
| NASDAQ:VIA | 41.01 | 23 Feb-2016 | 0.41 | 40.13 | 43.37 | 39.5 | 227,100 |
| HeffX-LTN Analysis for VIA: | Overall | Short | Intermediate | Long |
| Neutral (-0.14) | Neutral (-0.12) | Neutral (-0.23) | Neutral (-0.08) |
Stay tuned…
HeffX-LTN
Paul Ebeling
The post Viacom (NASDAQ:VIA) Exploring Sale Of Paramount Pictures appeared first on Live Trading News.