The reports that emerged yesterday suggesting that Paramount Skydance (PSKY) was pulling in money from several different Middle Eastern sovereign wealth funds to raise a bid for entertainment giant Warner Bros. Discovery (WBD) seems to have hit a snag. Paramount is denying that there is any connection to Saudi wealth, let alone that of Abu Dhabi or Qatar. The news hit Warner particularly hard, and sent shares down over 3% in the closing minutes of Wednesday’s trading.
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Earlier reports suggested that Paramount was looking to call in some extra investment help, and picked up three different Arab sovereign wealth funds to chip in a combined total of $21 billion to bolster its own $50 billion bid. But Paramount has denied the reports, asserting that the “…information Variety published is categorically inaccurate. This is a confidential process, which we respect, and, as such, will not be commenting until the process is over.”
So now the process is left somewhat in limbo, though given that reports note the deadline to file actual bids is tomorrow, we will likely be able to see for ourselves just what bids Warner pulled in, and for how much, in fairly short order. There is also still the possibility that Comcast (CMCSA) has pulled in some Saudi support, though that is unconfirmed as yet.
The Anti-Anti-Suit Injunction
Meanwhile, Warner is facing an odd development as its presence in streaming grows, having just won what was described as “…the brain-melting anti-anti-suit injunction” in the United Kingdom. This was apparently a move that Warner undertook in the U.K., aimed at addressing a kind of intellectual property principle known as FRAND, or Fair, Reasonable And Non-Discriminatory, licensing.
Warner won the case, ultimately, which basically, as one report put it, set up conditions where “…the Brits just told a Finnish multinational to not even think about asking the Germans to stop Hollywood from demanding a fair deal.” If that sounds convoluted, it is. But it also demonstrates the nature of patent law today, and its connection to the streaming video market, which is powered by a range of different technologies running at the same time.
Is WBD Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on eight Buys and 10 Holds assigned in the past three months, as indicated by the graphic below. After a 138.09% rally in its share price over the past year, the average WBD price target of $22.08 per share implies 4.56% downside risk.
