Paramount: Road to $38 from $17

Lions Gate Entertainment

11/12/2023 14:54

** Paramount shares  PARA.O  gain nearly 3% to $17.3 in
early trading, adding to Friday's 12% surge on takeover chatter
    ** Reports on Friday suggested Skydance Media boss David
Ellison and investment firm RedBird Capital are interested in
National Amusements, the Shari Redstone-led media company that
owns 77% of Paramount's Class A voting shares
    ** "Our sum-of-the-parts math suggests PARA's equity could
be worth ~$38 per share if the firm's networks, production
assets and DTC business were sold individually," Citi strategist
Jason Bazinet said on Friday
    ** Citi estimates PARA's cable networks are worth ~$7.4 bln,
broadcasting business at ~$12.1 bln, production assets at ~$18
bln and DTC business at ~$6.8 bln
    ** Citi, which has PT of $19, estimates firm could be worth
$38.8 bln; company closed Friday with a market cap of $11.13 bln
    ** Wells Fargo raises PT to $15 from $12 but says it could
hit $23/shr if there is more divestiture
    ** "If correct, RemainCo would be CBS Studios, Paramount
Studios, content creation from Taylor Sheridan/Nickelodeon/MTV,
etc" - Wells Fargo
    ** Wells Fargo says it expects other media names with M&A
potential such as Warner Bros Discovery  WBD.O  and Lions Gate
Entertainment  LGFa.N  to trade higher

 (Reporting by Sruthi Shankar in Bengaluru)
 ((sruthi.shankar@thomsonreuters.com;))