Warner Bros Discovery no longer pursuing Paramount acquisition – CNBC reports
Another potential mega-merger involving Warner Bros Discovery, this time involving an acquisition of Paramount Global, is not going ahead.
According to reports in the US from CNBC talks have been halted on the plans, which first emerged in December.
A separate deal which would see David Ellison’s Skydance acquiring a majority stake in Paramount’s parent company National Amusements, first reported in January, is still potentially in the works and going through due diligence, according to the same sources.
Media tycoon Byron Allen, a serial bidder but only occasional buyer of media assets, was also said to be lining up a $30bn bid for Paramount Global.
US-based news outlet Axios, which was first to report the Warner Bros Discovery bid, said WBD president and CEO David Zaslav and Paramount Global CEO Bob Bakish had met at the end of last year in New York to discuss a potential deal and WBD had hired bankers to explore the possibility.
For WBD, the talks are taking place less than two years after it was formed following the merger of WarnerMedia and Discovery. Due to the way the transaction was structured (via a Reverse Morris Trust deal), WBD is unable to participate in most major M&A moves for a two-year period. However, that two-year period ends in April.
In terms of market cap, WBD is around three times as big as Paramount Global, with a market cap of US$28.4bn to Paramount’s US$10.3bn. Both have enacted sweeping lay-offs and restructuring over the past 18 months. Paramount announced another 800 job cuts worldwide in February.
WBD lost 10% of its share price on Friday following publication of its Q4 results.
A deal would have brought together WBD’s assets, which include streamer Max, premium pay TV network HBO, Cartoon Network, Warner Bros Television, CNN and its portfolio of factual networks with Paramount’s portfolio of assets which includes streamer Paramount+, US broadcast network CBS, CBS News, Paramount Television Studios, Nickelodeon, its movie studio and coveted studio lot.
Skydance, meanwhile, is reportedly considering an all-cash bid to acquire a majority stake in National Amusements, the parent company of Paramount Global.
According to a report in the Wall Street Journal (WSJ), Skydance and its investors – which include Ellison’s father Larry, private equity firm RedBird Capital and China’s Tencent – are in talks with National Amusements owner Shari Redstone about a potential deal.
The WSJ said the deal being discussed would see Skydance acquiring a majority stake in National Amusements and then pursuing a swift follow-up deal to merge Paramount Global with Skydance. It noted that talks remain at an early stage and could come to nothing.
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