UBS Maintains 'Sell' Rating on Paramount Skydance Despite Deal with Warner Bros Discovery Clearing Final Hurdle
Despite the removal of a major obstacle in its acquisition of Warner Bros Discovery, UBS has maintained its 'sell' rating for Paramount Skydance Corp (NASDAQ:PSKY). The company reached a settlement with attorneys general from 12 states, allowing the deal to proceed and expected closure by September 30. Failure to close on time would incur significant daily fees. The antitrust lawsuit had previously threatened delays until mid-2027 and potential costs exceeding $1 billion in penalties for Paramount. The settlement includes behavioral conditions rather than structural ones, reducing concerns about forced divestitures but imposing film production targets that could trigger Miramax's sale if unmet. UBS noted the combined company’s heavy reliance on legacy television content as a risk. UBS also highlighted elevated leverage and potential limitations in carriage negotiations due to separate distribution agreements for Paramount and Warner cable networks over five years.
Topics: Analyst Ratings Mergers & Acquisitions Regulatory Settlements