world paramount The shares rose more than 5% on Friday after an investor known as Warren Buffett’s pet banker piled on the majority shareholder of the media company.

National Amusements, Paramount’s majority voting shareholder, announced Thursday afternoon that it has reached an agreement for a preferred equity investment of $125 million from BDT Capital Partners.

Some Buffett watchers noted a curious connection to the news. BDT Capital’s Chairman and Co-CEO is Byron Trott, who has long been known as Buffett’s trusted and preferred banker. It was Trott who suggested that Buffett put a $5 billion lifeline into Goldman Sachs during the 2008 financial crisis.

The connection did not end there. Buffett’s Berkshire Hathaway is actually Paramount’s largest institutional investor with a 15.4% stake, according to FactSet. Berkshire initially took the stake in the first quarter of 2022, and the stake is worth about $1.32 billion after Paramount’s recent liquidation.

Paramount is down more than 30% since the start of the second quarter after its quarterly earnings and revenue missed analysts’ estimates, and CBS’s parent company cut its quarterly dividend.

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

‘Not good news’

When asked about Paramount at Berkshire’s annual shareholder meeting in early May, the 92-year-old Buffett struck a negative tone about the big dividend cut, while noting his pessimistic outlook for the broadcast business.

“It’s not good news when a company passes its dividend or slashes it,” Buffett said. “The streaming business is extremely interesting to watch… there are a lot of companies doing it. And you need fewer companies or you need higher prices. And, well, you need higher prices or it doesn’t work.”

It was unclear whether it was Buffett who bought the Paramount position or his investor lieutenants, Ted Weschler and Todd Combs, each of whom oversees $15 billion at Berkshire.

Update from Loop

Loop Capital on Friday upgraded Paramount to a hold rating from a sell rating in light of the BDT investment. The Wall Street firm said the bullish case is that financial pressure will force Paramount to find a buyer and shareholders will realize private market value.

“While we still believe a change in PARA will be challenging, investor perception of the company could change with a motivated seller, savvy bankers and Berkshire’s stock strings,” Loop Capital said in a note.