Warner Bros. Discovery, the parent company of CNN and HBO, announced Tuesday that it is up for sale after receiving unsolicited interest from multiple potential buyers.
The news adds a new wrinkle to an already-planned shakeup at the media giant. In June, WBD announced plans to cleave the company into two separate publicly traded companies. The company’s streaming and studio brands—which include HBO, HBO Max, Warner Bros. Pictures, and New Line Cinema—would be part of Warner Bros., while Discovery Global would oversee its cable networks that include CNN, TNT Sports, and Discovery.
Though it’s not abandoning plans to split the company, WBD indicated in its announcement on Tuesday that it’s now reviewing “strategic alternatives,” with no set timeline for this process. This move merely confirms what many people had already suspected—that the company wants to be acquired.
Earlier this month, the newly merged Paramount Skydance Corporation reportedly made a lowball offer for the company. WBD rejected a takeover offer from Paramount of about $20 per share, according to reporting by Bloomberg. The newly appointed Paramount CEO, David Ellison, has made it clear he’d like to buy Warner Bros. Discovery before that split can occur.
‘INTEREST FROM MULTIPLE PARTIES’
But Ellison isn’t the only interested buyer, it seems, and that news sent shares of WBD surging more than 10% in midday trading Tuesday to as high as $20.58. And it may scuttle plans that Ellison, son of billionaire Oracle founder Larry Ellison, has for completing another mega-consolidation in the media industry.
“It’s no surprise that the significant value of our portfolio is receiving increased recognition by others in the market,” David Zaslav, president and CEO of WBD, said in a statement. “After receiving interest from multiple parties, we have initiated a comprehensive review of strategic alternatives to identify the best path forward to unlock the full value of our assets.”
Among the other companies interested in a possible acquisition of part or all of WBD? The list includes Netflix and Comcast, sources told CNBC’s David Faber.
SHAREHOLDER VALUE
While splitting up the company—similar to what NBCUniversal did this year with its networks and various entitites—is still WBD’s preferred path forward, its board decided to consider all opportunities, according to chair Samuel A. Di Piazza, Jr. “We determined taking these actions to broaden our scope is in the best interest of shareholders.”
WBD shares have nearly doubled in value this year.
And the acquisition interest means it’s likely that Warner Bros. Discovery could sell before that split occurs. And if there’s a bidding war, the winner may have to pay upwards of $60 million to acquire the media company, according to estimates, even though the company is saddled with more than $40 million in debt related to its 2022 merger of WarnerMedia and Discovery Inc.