Paramount Global's (PARA) exit options are weak, and "sum-of-the-parts based bull cases will continue to lose value, according to analysts at Wolfe Research on Wednesday.
The comments follow a Bloomberg article on Tuesday evening that said Byron Allen seeks to acquire Paramount for ~$30 billion.
"After various indications of interest from RedBird/Skydance, Warner Bros. Discovery, and Apollo, the Allen leak fuels speculation a transaction is nigh," the analysts said, who have an Underperform rating and $13 price target on PARA shares.
PARA shares are up 9% at close to $15 per share at 1:20 pm on Wednesday.
"We question why this transaction was leaked and how it would be financed. $30B is a very big number, historical free cash flow generation has been poor, and the debt filings indicate that the majority of the debt would require refinancing in case of a change of control," the analysts wrote.