Investing.com -- Paramount reported first-quarter earnings that topped Wall Street expectations and the media giant announced that Chief Executive Bob Bakish has stepped down amid ongoing talks over a potential tie-up with David Ellison's Skydance Media.
George Cheeks, CEO of CBS, Chris McCarthy, CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks and Brian Robbins, Chief Executive Officer of Paramount Pictures and Nickelodeon were appointed to the newly created Office of the CEO to "lead and oversee the company moving forward," the company said.
"We suspect this latest management change likely foreshadows a potential change of control. As such, we suspect this leadership change is apt to be transitory," analysts at Citi said in a note.
The shake-up comes as various media reports said Skydance had sweetened its bid to take control of Paramount, offering to inject $3 billion into the combined company that can used to pay down debt and buy back stock. The Financial Times added that the offer includes roughly $2 billion to take over National Amusements, the holding company controlled by Shari Redstone that owns an almost 80% stake in Paramount's voting shares.
Paramount also provided mixed first quarter results as earnings beat expectations, but revenue missed analyst estimates. For the first quarter, Paramount posted adjusted earnings per share of $0.62 on revenue of $7.69 billion, compared with estimates for EPS of $0.36 and revenue of $7.73 billion.
Analysts at Wells Fargo noted that, due to a "lack of engagement" with Wall Street observers by Paramount management following the results, a deal with Skydance appears to be "imminent."
"Actions speak louder than words and the actions at the Paramount board level give us every indication a deal is close. We think Ms. Redstone wants a deal [with] Skydance and has the means to push it through," the analysts said.
Paramount Global Class B shares (NASDAQ:PARA) were up nearly 1% in afterhours trading.
Yasin Ebrahim contributed to this report.