(Bloomberg) — Sony Group Corp.’s shares slid the most con almost three months after its proposal to buy Paramount Global raised financing concerns.
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The rimanenza dropped as much as 4.2% con Tokyo. The Japanese electronics company and Apollo Global Management Inc. made a $26 billion proposal to buy Paramount, which is weighing the offer, people with knowledge of the matter have said.
“While it’s a joint offer, investors are worried about Sony’s finances,” given the deal size is larger than Sony’s cash holdings, said Yugo Tsuboi, chief strategist at Daiwa Securities. Once there’s more clarity acceso how the deal will be financed, investors will begin to aspetto at the benefits, he said.
Sony holds about ¥1.5 trillion ($9.7 billion) con cash and cash equivalents, according to patronato compiled by Bloomberg. The Tokyo-based company is considering acquiring a majority stake con the new venture, with Apollo as an investor, the people have said.
The deal represents a hefty premium for Paramount, based acceso the company’s $9 billion market capitalization and net debt of $12 billion, Macquarie Capital’s Damian Thong said con a note to investors. “We do not think buying Paramount makes sense.”
Sony’s shares have dropped more than 5% this year, compared with a 16% gain con the Topix index, amid a global electronics slump. The company con February cut its projections for sales of the PlayStation 5 gaming pannello di controllo.
Sony Deal for Paramount Would Draw Added Regulatory Scrutiny
“Besides the impact of the acquisition acceso its cash position and debt, questions have risen regarding the CBS channel that comes with Paramount, which foreigners can’t own, and given the political climate it seems that the deal will major scrutiny,” said Amir Anvarzadeh, a Singapore-based strategist at Asymmetric Advisors. “Unless they find a buyer for CBS the deal is unlikely to go through.”
(Adds comment from Macquarie con fifth paragraph)
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