Media giant Warner Bros. Discovery (WBD) has asked for improved offers from potential acquirers Paramount Skydance (PSKY), Netflix (NFLX), and Comcast (CMCSA), setting a deadline for submissions on Monday, December 1. Following their submissions, WBD could reportedly hold exclusive negotiations with one of the interested companies.
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The three companies submitted their first round of non-binding bids on November 20, although neither Warner Bros. nor the bidders disclosed the details. Meanwhile, WBD plans to proceed with its split into Warner Bros. and Discovery Global, which is expected to complete in April.
WBD expects the sale process to finish by late December, but regulatory approval could take at least a year. After the Thanksgiving holiday, bankers and executives will be focused on evaluating the new offers. The bidders have already signed non-disclosure agreements and reviewed Warner Bros.’ financials.
Initial Bids Seen as Undervaluing WBD’s Business
Warner Bros. Discovery’s board requests for sweeter offers indicates dissatisfaction with the first round of bids from Paramount, Netflix, and Comcast. David Ellison-led Paramount Skydance aims to acquire all of WBD’s divisions, including studios, news operations, and legacy TV assets. In contrast, Comcast and Netflix are interested only in its movie and television studios and the HBO Max streaming platform.
WBD’s board has rejected three of Paramount’s earlier offers, with the last one being a cash-and-stock deal valued at approximately $23.50 per share, equating to an enterprise value near $60 billion. Recent rumors about PSKY increasing its bid to $30 per share were denied by the company. All bidders will likely face regulatory review, though Paramount Skydance is expected to encounter the least resistance.
A successful deal would significantly expand Paramount’s cinema market share to about 32% in North America and bolster its streaming service by combining HBO Max with Paramount+.
PSKY, CMCSA, NFLX: Which Is the Best Media Stock, According to Analysts?
We used the TipRanks Stock Comparison Tool to determine which media company is currently preferred by analysts.
Analysts have assigned a “Strong Buy” consensus rating on NFLX stock and it has a TipRanks Smart Score of Eight, implying it is expected to outperform market expectations. Conversely, Wall Street remains more cautious about the long-term outlook of Comcast and Paramount Skydance shares.
