Paramount pops after Buffett's favorite banker makes 'interesting' bet in media giant's key shareholder

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Paramount Global shares jumped more than 5% on Friday after an investor known as Warren Buffett's favorite banker piled into the media company's controlling shareholder.

National Amusements, Paramount's majority voting shareholder, announced Thursday afternoon that it has entered into an agreement for a $125 million preferred equity investment by BDT Capital Partners.

Some Buffett watchers noticed a curious connection with the news. BDT Capital's chairman and co-CEO is Byron Trott, who has long been known as Buffett's preferred and trusted banker. It was Trott who suggested that Buffett put a $5 billion lifeline in Goldman Sachs during the 2008 financial crisis.

The connection didn't end there. Buffett's Berkshire Hathaway is actually Paramount's biggest institutional investor with a stake of 15.4%, according to FactSet. Berkshire initially took the stake in the first quarter of 2022, and the bet is worth about $1.32 billion after Paramount's recent sell-off.

Paramount has slid more than 30% since the start of the second quarter after its quarterly earnings and revenue missed analyst estimates, and the CBS parent slashed its quarterly dividend.

«So what we now have here is Trott having a say on what happens at NAI. And NAI having a say in what happens to Buffett's 15% stake in PARA,» Don Bilson, head of event-driven research at Gordon Haskett, said in a note. «Where this goes is TBD but with Buffett and his banker in the mix, this situation is more interesting today than it was when the week began.»

Asked about Paramount at Berkshire's annual shareholder meeting early May, Buffett, 92, struck a negative tone about the big dividend cut, while signaling his pessimistic outlook for the streaming business.

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