warner bros discovery The company announced Tuesday that it is expanding its strategic review of its business and is open to a sale, sending its shares up 10% in morning trading.
Earlier this year, WBD announced plans to split into two separate entities: the streaming and studio business and the global network business. It is also attracting takeout interest from newly merged companies. paramount skydance.
However, WBD announced on Tuesday that it had received “unsolicited interest” from multiple parties and would consider all options going forward. The company said it is still moving toward its previously announced separation for the time being.
“We continue to make important strides to succeed in today’s evolving media environment by advancing our strategic initiatives, restoring our studio to industry leadership, and expanding HBO Max globally,” CEO David Zaslav said in a statement. “We took the bold step of preparing to separate our company into two separate leading media companies, Warner Bros. and Discovery Global, because we strongly believed this was the best path forward.”
“It is not surprising that the material value of our portfolio has been increasingly recognized by others in the market. Following interest from multiple parties, we have begun a comprehensive review of strategic alternatives to identify the best path to maximizing the value of our assets,” he said.
Netflix and comcast People familiar with the matter told CNBC’s David Faber that they are also among the stakeholders.
WBD decided to announce interest from multiple parties after rejecting multiple different bids from Paramount and offers from other companies that exceeded Paramount’s bid, according to people familiar with the matter.
It’s unclear how serious an offer from outside Paramount would be. Netflix wasn’t interested in acquiring legacy media assets, but didn’t want WBD to go to another buyer at a lower price, the people said.
Comcast doesn’t see a need for a deal, but will consider the possibility of pursuing WBD, a person close to the company told CNBC’s Julia Boorstin.
For buyers who only want WBD’s studio and streaming assets, it would be tax-advantageous to acquire them after the split later this year.
Spokespersons for Paramount and WBD declined to comment. Netflix and Comcast did not respond to requests for comment.
WBD has faced increasing financial challenges since the 2022 merger of WarnerMedia and Discovery, with more than $40 billion in debt. Since then, the company has aggressively cut costs, restructured its content pipeline and focused on profitable franchises such as “Harry Potter” and “Game of Thrones” spinoffs.
The company has made progress in reducing debt, but investors remain skeptical, in part because of the company’s cable network portfolio as consumers turn to streaming.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. With Comcast’s planned Versant spinoff, Versant will become CNBC’s new parent company.
