WBD considering sale amid Paramount’s attempt to buy entire company
Warner Bros Discovery (WBD) has said it is reviewing “strategic alternatives” to maximise shareholder value following what it characterised as “unsolicited interest” from “multiple” parties about acquiring all or parts of the company.
New York-headquartered WBD is in the process of splitting into two, with one company (Warner Bros) housing the studio and streaming assets including HBO, HBO Max, Warner Bros Television and Warner Bros Motion Picture Group, and the other housing the linear networks and several other assets, including Discovery+, all under the Discovery Global brand.
According to WBD, it is undertaking this review process after receiving interest from multiple potential suitors to acquire both the whole company or just Warner Bros.
The company, led by president and CEO David Zaslav, said it is evaluating a broad range of strategic options, including forging ahead with the planned separation (set to be completed by mid 2026), a sale of the entire company or separate transactions for Warner Bros and/or Discovery Global.
It added that it is also considering an “alternative separation structure that would enable a merger of Warner Bros and spin-off of Discovery Global to our shareholders.”
The company’s decision to go public with the review comes after David Ellison-led Paramount reportedly tabled a bid to acquire all of WBD for around US$20 per share earlier this month. WBD rejected the offer as too low, with Zaslav and his leadership team now reportedly being eager to convince investors that selling the company in two separate parts would create more value for shareholders.
Paramount has subsequently made an improved bid for all of WBD for around US$24 per share, according to the New York Post, though that offer has also been rejected.
Netflix and Apple have also seemingly ruled themselves out of the running to acquire Warner Bros in recent weeks.
There is no definitive timeline for this strategic review, said WBD, adding that it does not plan to make further announcements unless its board deems it appropriate. The company will report its third-quarter earnings on November 6.
“We took the bold step of preparing to separate the company into two distinct, leading media companies, Warner Bros and Discovery Global, because we strongly believed this was the best path forward,” Zaslav in a statement on Tuesday.
“It’s no surprise that the significant value of our portfolio is receiving increased recognition by others in the market. 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.”
WBD’s board chair, Samuel A Di Piazza Jr, added: “Our decision to initiate this review underscores the board’s commitment to considering all opportunities to determine the best value for our shareholders. We continue to believe that our planned separation to create two distinct, leading media companies will create compelling value. That said, we determined taking these actions to broaden our scope is in the best interest of shareholders.”
WBD’s share price was up by 11% to US$20.33 per share on Tuesday following its announcement, which marks the first occasion on which it has publicly stated that it is for sale. The share price has risen more than 60% since The Wall Street Journal initially reported that Paramount was preparing a bid on September 12.
