Paramount Skydance Makes Bid for Warner Bros. Discovery
Paramount Skydance is reportedly planning a significant bid for Warner Bros. Discovery, potentially valuing the troubled media company at up to $24 per share. This information comes from a CNBC report.
The proposed deal is anticipated to consist of 70% to 80% cash, with support from Larry Ellison, the Oracle co-founder and father of Paramount Skydance CEO David Ellison.
CNBC’s David Farber mentioned that the tentative bid from Ellison-controlled Paramount Skydance ranges between $22 and $24 per share.
Despite starting the day down in the markets, Warner Bros. Discovery’s stock began to rise after CNBC’s report was released around 10:30 AM ET.
By 11 AM ET, the stock had increased by nearly 2%. Meanwhile, Paramount Skydance’s stock has also seen a slight uptick.
It’s worth noting that Farber indicated these figures might be speculative, and formal offers could take longer to materialize than initially expected.
If successful, the offer would put Warner Bros. Discovery, currently valued around $19 per share, at a substantial premium.
In addition, reports suggest that Warner Bros. Discovery’s CEO, David Zaslav, is actively engaging in a bidding war against the $40 billion media giant, particularly regarding David Ellison’s Paramount Skydance.
After the initial news of Ellison’s bid, Warner Bros. Discovery’s stock jumped almost 30%. However, if the desired price targets aren’t achieved, Zaslav might consider splitting the company into two publicly traded entities next year.
Zaslav has also met with Goldman Sachs bankers to discuss interest from major players like Amazon, Apple, and Netflix, aiming to boost share prices to $40 from the current $16.
Recently, Warner Bros. Discovery revealed plans to separate its global television network division from its streaming and film studio assets, paving the way for potential sales or partnerships that have attracted attention from private equity firms and competing studios.
This proactive move by Paramount Skydance could position the company favorably, adding a wealth of assets, including popular lifestyle channels under HBO, CNN, Warner Bros. Pictures, DC Studios, and Discovery.
This bid follows only months after Paramount Global merged with David Ellison’s Skydance, establishing an $8 billion partnership that offered significant control over a major Hollywood player previously led by Shari Redstone.
Such a combination would form an even larger entity, combining Paramount Pictures, CBS, MTV, Nickelodeon, and a robust portfolio of sports rights. In essence, merging with Warner Bros. Discovery would result in a major force in the industry with two prominent studios and one of the largest pay-TV networks globally.
Industry analysts interpret this bid as indicative of mounting pressure on traditional media companies, especially as cable cutting accelerates and the growth of streaming services slows.
Warner Bros. Discovery has been grappling with debt since its 2022 merger and has faced challenges in making its flagship streaming service a serious contender to Netflix.
Recent reports suggest that Ellison’s team is closely monitoring Warner Bros. Discovery’s aggressive strategy, setting the stage for a high-stakes battle over Hollywood’s future.
Any merger would require approval from the Federal Communications Commission and the Department of Justice, with antitrust considerations likely to come into play.
As of now, neither Paramount Skydance nor Warner Bros. Discovery has officially responded to the bid.
