UPDATE: Warner Bros. Discovery has officially launched a formal auction as it seeks a competitive bidding war for the media giant. This critical move comes as potential suitors, including Paramount Skydance, have expressed significant interest, sources reveal.
Earlier today, bankers from JPMorgan and Allen & Co. began reviewing bids from various contenders, with Paramount Skydance’s CEO David Ellison leading the charge. This development follows a board meeting where strategies to entice bidders were discussed.
The bidding process has intensified, with interested parties receiving non-disclosure agreements to access Warner Bros. Discovery’s financial details. At the forefront of this auction is Ellison, who has made three formal bids for the company, the most recent being a staggering $23.50 per share, totaling $56 billion.
Despite the aggressive offers, Warner Bros. Discovery CEO David Zaslav has rejected each bid, positioning himself to spark a high-stakes bidding war that could elevate the sale price beyond $25 per share. Sources indicate that Zaslav anticipates another bid from Ellison soon, which could take the form of a public or hostile offer.
Ellison, who has connections to former President Donald Trump, is reportedly banking on regulatory roadblocks to deter competitors like Netflix, Amazon, and Comcast, which operates networks like MSNBC. According to insiders, Ellison believes that Trump’s administration may pose challenges for Comcast due to its perceived political affiliations.
“(David) feels like ‘we did what he was supposed to do: Fix the company and then if he has to sell at a premium,’” said a source familiar with Zaslav’s strategy.
As the auction unfolds, Zaslav is looking to split Warner Bros. Discovery into two distinct units: one focused on its studio and streaming services, and the other managing its cable properties. This restructuring aims to maximize the company’s value, especially in light of analysts estimating that the studio and streaming segments could be worth up to $30 a share.
This auction represents a pivotal moment for Warner Bros. Discovery, which has experienced a significant turnaround under Zaslav’s leadership. The company recently achieved record box office revenues, making it the first studio to surpass $4 billion this year, and its HBO Max service has gained popularity, boasting 73 million global subscribers.
As the competitive landscape heats up, all eyes will be on Ellison and his next move, with industry experts suggesting that the stakes are higher than ever. Warner Bros. Discovery’s future hangs in the balance as this auction could redefine the media landscape.
Stay tuned for more updates on this developing story as the auction progresses and potential bids continue to emerge.
