Warner Bros. Discovery Rejects Paramount Skydance's $20 per Share Takeover Bid: What's Next?
Warner Bros. Discovery recently turned down a takeover offer from Paramount Skydance, led by David Ellison, for approximately $20 per share, deeming it too low. The rejection came as Warner Bros. Discovery's shares closed at $17.10/share, showing a significant increase since news of Ellison's interest in bidding for the company. Warner Bros. Discovery, the parent company of HBO, Warner Bros. Entertainment, CNN, TNT, TBS, and more, has a market cap of $42.3 billion. It is unclear if Paramount's bid included taking on Warner Bros. Discovery's total debt of $35.6 billion as of June 30.
Paramount Skydance has been in discussions with Apollo Global Management, the asset management firm that previously bid for Paramount Global, to potentially collaborate on a bid for Warner Bros. Discovery. Larry Ellison, the billionaire founder of Oracle and David's father, provided most of the funding for Skydance's $8 billion acquisition of Paramount Global. Representatives for Paramount, Warner Bros. Discovery, and Apollo have not commented on the matter.
David Ellison, speaking at a recent conference, did not confirm Paramount Skydance's bid for Warner Bros. Discovery but emphasized the need for Paramount to expand its content production capabilities to thrive in the streaming-focused industry. He highlighted Warner Bros. Discovery CEO David Zaslav's remarks on the necessity of industry consolidation. Ellison expressed interest in increasing content production to enhance engagement but did not disclose potential acquisition targets.
The potential bid from Paramount Skydance for Warner Bros. Discovery would encompass the entire company, as reported by the Wall Street Journal. This move comes ahead of Warner Bros. Discovery's planned split into two separate entities next spring: Warner Bros., focusing on studios and streaming services, and Discovery Global, encompassing TV networks and Discovery+. The industry awaits further developments in this evolving landscape of media and entertainment consolidation.