Recently-merged company Paramount Skydance (PSKY) is reportedly planning to acquire larger rival Warner Bros. Discovery (WBD) in an all-cash deal, according to the Wall Street Journal. The offer could be made as soon as next week, according to sources. Shares of both companies rocketed on the news, with PSKY surging nearly 16% and WBD soaring almost 29%.
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Both stocks also hit new all-time highs on September 11, reflecting strong investor optimism about the potential acquisition. However, no formal bid has been submitted yet, and the deal could still fall apart. The transaction would also likely face significant regulatory and antitrust scrutiny given the scale of the two media giants.
Details of the Potential Deal
Reports suggest that Paramount Skydance plans to acquire the entire Warner Bros. company, including its cable networks and movie studio. The idea is to make the bid before WBD’s proposed corporate restructuring. In June, Warner Bros. confirmed plans to split into two independent companies, with one focusing on its legacy TV networks and the other on streaming and studios.
By proposing an acquisition before the split, Paramount Skydance could be trying to stay ahead of any potential buyers, who could be interested in parts of the divided company. Speculation suggests that major tech firms such as Amazon (AMZN) and Apple (AAPL) could be a part of the bidding war alongside streaming giant Netflix (NFLX). Notably, NFLX stock dropped 3.5% yesterday, following the news of Paramount’s planned bid.
Currently, Paramount’s market capitalization is nearly half that of Warner Bros. Discovery’s $32 billion valuation (before the news). The deal would reportedly be backed by the Ellison family. David Ellison, CEO of the newly merged Paramount Skydance, is supported by his father Larry Ellison, co-founder of software giant Oracle (ORCL).
If such a deal indeed goes through, it would combine two of Hollywood’s most successful studios and streaming platforms, including HBO Max and Paramount+. Warner Bros. Discovery boasts some blockbuster franchises such as Barbie, DC Comics, and Harry Potter, along with leading news networks including CNN, TBS, and TNT.
PSKY or WBD: Which Is the Better Media Stock?
We used the TipRanks Stock Comparison Tool to determine which of the two media companies is preferred by Wall Street. Currently, WBD has a “Moderate Buy” consensus rating, while PSKY has a “Hold” consensus rating, suggesting that analysts are slightly more bullish on Warner Bros. Discovery than on Paramount Skydance.
