Another hurdle in the merger between media giant Paramount ($PARA) and Skydance has been passed, though from the looks of it, there are many more still to pass. The European Union has given its approval to the merger, and in so doing, sent shares of Paramount up fractionally in the closing minutes of Tuesday’s trading.
The European Union, by way of the European Commission, approved the merger of Skydance Media and Paramount Global. It also approved the acquisition of National Amusements Inc., the majority shareholder of Paramount, by Skydance and one of its chief backers in the deal, RedBird Capital Partners.
Reports noted that the European Commission found no real concern about competition issues as a result of the merger. The Commission found that the companies involved had “limited market positions” as a result of the merger in question. Thus, getting the two of them together would not necessarily make it harder for any other company to compete.
Matters Less Than You May Think
While this is certainly a step forward for the Paramount / Skydance merger, it also comes amid several outstanding roadblocks. There is the issue of Mario Gabelli’s research to consider, the lawsuit from President Trump, a class action suit from Scott Baker, the potential interference from the Federal Communications Commission—not to mention the Federal Trade Commission—and now, one more hat has been thrown into that ring: a pension fund from New York.
In fact, several pension funds from New York are getting together to petition a Delaware judge to block the merger from going through with an injunction. The issue at stake is a familiar one, as the funds in question claim that the merger as it sits is “excessively favorable” to controlling shareholder Shari Redstone. It was not the only pension fund getting involved, either, as the State of Rhode Island-managed Employees’ Retirement System will also have a case coming in, reports noted.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on two Buys, two Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 19.53% loss in its share price over the past year, the average PARA price target of $12.29 per share implies 16.22% upside potential.
