Viacom’s (NASDAQ: VIAB) Chief Executive Officer Philippe Dauman said on Tuesday that potential investors who want to buy a stake in Paramount Pictures have approached the company. Stock went up on the news.
Dauman initially announced the potential deal at the Jefferies Media & Communications Conference. Then he made a statement saying that he is discussing a deal with a small group of potential investors.
Paramount Pictures Corporation is a film studio, television production company and motion picture distributor, consistently ranked as one of the "Big Six" film studios of Hollywood. It was founded in 1912 and acquired by Viacom in 1994.
"In this time of change and enormous opportunity in our industry, a partnership will bring significant benefit to Paramount and Viacom, both strategically and financially, provide new opportunities for Paramount's employees and talent, and enhance long-term value for all Viacom shareholders," Dauman said, in the statement.
The studio is valued at $4 billion in a research report written by Todd Juenger, an analyst at Sanford C. Berstein & Co. in New York. Paramount has been struggling in recent years and released fewer movies than other major studios. Its ranking is the last among the six largest film studios in 2015 and the studio has less than 6 percent market share, much lower than the leader Universal Studios.
Mario Gabelli, one of the largest shareholders, also called for a deal on Paramount, including separating Paramount into a joint venture with a partner like Alibaba.
According to Bloomberg, potential buyers include Apple Inc., Amazon.com Inc. and Alibaba Group Holding Ltd. Alibaba invested in Paramount’s “Mission: Impossible-Rogue Nation.”
Viacom also said that the company would maintain its control of the film studio after the deal.
Viacom’s shares were up 1.51% to $41.21 at 3:27 p.m. in New York.