The top five U.S. publishers are Penguin, HarperCollins, Macmillan, Simon & Schuster and Hachette.
Following a collapse of the deal, Paramount will be free to explore a sale of Simon & Schuster anew.
Previously known as ViacomCBS, Paramount had inked the Penguin deal so it could focus on its video and streaming businesses.
HarperCollins, which is controlled by News Corp (NWSA.O), and Lagardere SCA's (LAGA.PA) Hachette Book Group have previously expressed interest publicly in buying Simon & Schuster.
HarperCollins also unsuccessfully bid for Simon & Schuster when it was put up for sale by Paramount in early 2020.