Warner Bros Discovery Considers Bidding War Amid Acquisition Plans
David Zaslav, the head of Warner Bros Discovery, seems to be contemplating the possibility of initiating a bidding war in the media landscape, especially as David Ellison’s Skydance gears up for a significant acquisition attempt.
So far, Skydance has not revealed any official offers for Warner Bros Studios or HBO Max, which also manages channels like Discovery, TNT, and CNN.
However, Zaslav appears eager to move quickly. Reports indicate he recently met with a banker from Goldman Sachs to gauge interest from other tech and media giants, such as Amazon, Apple, and Netflix.
His objective? To elevate the stock price to around $40 per share. Currently, it’s hovering just above $16, with a market value around $40 billion. If he can’t achieve the desired price, sources suggest he might rely on stock evaluations to acquire additional content.
Ellison mentioned, “It’s better to come up with a really good offer, and having cash is advantageous.” He seems intent on stepping ahead as the bidding war develops.
Representatives from Warner Discovery didn’t respond to requests for comments, and Skydance also chose not to comment.
The stock for Warner Discovery surged nearly 30% recently after news broke about Ellison’s aggressive bidding plans. Zaslav is preparing to split the company into two separate public entities, including one focused on streaming and another on studio operations.
This spin-off is expected to take place next April. It’s still unclear if Zaslav plans to sell Warner Discovery as a complete package or break it up into smaller parts.
As reported, media mogul Jay Penske, known for owning several media properties, has expressed interest in acquiring CNN, which has seen fluctuating ratings.
Yet, Zaslav seems to think Penske might be low-balling him, although neither party commented on the matter immediately.
Until recent acquisition interest arose, Zaslav had been concentrating on cutting costs. Warner Bros Discovery’s shares have been struggling while trying to manage $35 billion in debt. But with shifting times, Zaslav now believes that the regulatory climate could favor mergers, pushing tech companies eager for content.
Amazon and Apple are continuing to expand their own content through services like Amazon Prime and Apple+. Netflix remains on the lookout for new material as well. Ellison’s Skydance recently finished a deal that saw it acquire Paramount for $8 billion, with backing from Oracle co-founder Larry Ellison.
Meanwhile, the other Ellison, a notable figure and close ally of former President Trump, is apparently in a wealth showdown with Elon Musk.
Interestingly, the Trump administration had been less stringent about mergers compared to the current Biden administration, which has tightly scrutinized most merger plans across various sectors over the years.
During Trump’s first term, there was significant resistance to AT&T’s purchase of Time Warner. Ultimately, a federal court ruled in AT&T’s favor, allowing that deal to go through. Fast forward to 2022, which saw a merger between Warner and Zaslav’s Discovery, marking a significant shift in the media landscape.
Now, as Trump ally Ellison anticipates further expansion via merger activities, it seems likely that the regulatory approach could be more favorable in the current climate, or so Wall Street bankers believe.
