Reports of takeover interest cause Paramount shares to rise.

• Reports of RedBird and Skydance exploring a potential takeover of Paramount caused its shares to surge.
• A deal has been in the market for a while, with Paramount's controlling shareholder, Shari Redstone, being actively involved.

On Friday, shares of the media giant surged after reports from Deadline and Puck News indicated that Skydance and RedBird Capital were considering acquiring the company.

Friday, Paramount's shares closed up more than 12%. Despite having a market cap of approximately $10.4 billion and a year-to-date share price that is virtually flat, the company has lagged the S&P 500's 20% gain.

Shari Redstone, Paramount's controlling shareholder, has been open to making big deals amid declining revenue and streaming losses.

Gerry Cardinale, a longtime former Goldman Sachs partner, controls RedBird, which invests in various media and sports assets, including Skydance, the production company behind Paramount's 2022 blockbuster "Top Gun: Maverick."

The long-term debt load of $15.6 billion poses a challenge for Paramount in 2024, and investors are concerned about the company's ability to overcome this obstacle. Additionally, TV ad revenue was a weak spot for Paramount in its most recent quarterly report.

Apple TV+ may be bundled with Paramount+, according to reports.

CNBC did not receive immediate responses from Paramount, RedBird Capital, and Skydance when requested for comment.

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