- Warner Bros. Discovery (NASDAQ:WBD) shares jumped over 10 per cent, hitting a 52-week high after announcing a comprehensive review prompted by unsolicited interest from multiple parties.
- The board is considering a full sale, separate deals for Warner Bros. and Discovery Global, or a revised split-and-spin structure
- CEO David Zaslav confirmed growing market interest but emphasized there’s no set timeline or guarantee of a transaction beyond the planned separation
- Warner Bros. Discovery stock (NASDAQ:WBD) opened trading at US$20.98
It is the big news of the week.
Warner Bros. Discovery (NASDAQ:WBD) shares rose more than 10 per cent reaching a 52-week high of US$21.22, after the entertainment conglomerate announced it is exploring alternatives following unsolicited interest from multiple parties.
Since this news broke on Tuesday, WBD stock has increased $0.20, or approximately 0.98 per cent.
The company’s board of directors has initiated a comprehensive review to “maximize shareholder value,” evaluating options that include:
- Continuing with its previously announced plan to split into two entities — Warner Bros. and Discovery Global — by mid-2026
- A full acquisition of the company
- Separate transactions for its Warner Bros. studio and Discovery Global cable businesses
- A hybrid structure involving a merger of Warner Bros. and a spin-off of Discovery Global to shareholders
“It’s no surprise that the significant value of our portfolio is receiving increased recognition by others in the market,” CEO David Zaslav said in a news release. “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.”
Paramount Skydance leads the pack
Paramount Skydance (NASDAQ:PSKY), led by David Ellison, has emerged as a leading contender. The company reportedly submitted three bids, including a recent offer of nearly US$24 per share — 80 per cent in cash — which WBD rejected as undervaluing the business. Analysts suggest Ellison’s deep financial backing and political connections could ease regulatory hurdles, positioning Paramount as a strong candidate.
Other interested parties
Netflix (NASDAQ:NFLX) and Comcast (NASDAQ:CMCSA) have also expressed interest, though their strategies differ. Netflix has downplayed its appetite for legacy media assets, focusing instead on selective acquisitions that align with its streaming-first model. Comcast, meanwhile, may pursue parts of WBD that complement its restructuring plans, particularly the studio and streaming divisions.
Analyst sentiment and valuation
Benchmark raised its price target for WBD to US$25, citing improved performance at Warner Bros. Studios and HBO Max, and a sustainable free cash flow yield post-2025. Guggenheim and CFRA also revised their targets upward, reflecting growing confidence in the company’s strategic direction and asset value.
Despite the surge in share price and heightened deal speculation, WBD cautioned that there is no definitive timeline for the review and no guarantee of a transaction beyond the planned separation.
About Warner Bros.
Warner Bros. Discovery Inc. values itself around US$50 billion and has a US$57 billion market cap. It is a global media and entertainment company that creates and distributes a portfolio of branded content across television, film, streaming and gaming.
Warner Bros. Discovery stock (NASDAQ:WBD) opened trading 2.19 per cent higher on Thursday at US$20.98 and has risen more than 98 per cent since the beginning of the year.
Join the discussion: Find out what the Bullboards are saying about Warner Bros. Discovery and check out Stockhouse’s stock forums and message boards.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here.