Warner Bros. Discovery’s (WBD) board has requested that key bidder Paramount Skydance (PSKY) increase its offer to $30 per share, according to Axios. The previous cash-and-stock offer of $23.50 per share was rejected by WBD’s board as it undervalued the media giant.
Meet Your ETF AI Analyst
- Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions
- Explore ETFs TipRanks' users love and see what insights the ETF AI Analyst reveals about the ones you follow.
The revised offer would value Warner Bros. at about $74.34 billion, significantly higher than the prior valuation of $58.23 billion, and WBD’s current market capitalization of $58.7 billion. Warner Bros. has set a deadline of Thursday, November 20, for first-round bids. Paramount, Comcast (CMCSA), and Netflix (NFLX) are all preparing their bids accordingly.
Paramount Denies Consortium Claims
Earlier Tuesday, Variety reported that PSKY had formed an investment consortium with the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi to submit a bid for Warner Bros. The report even noted that each fund would contribute $7 billion (a combined $21 billion), with Paramount Skydance adding $50 billion, making the total offer $71 billion, citing sources familiar with the matter. The news boosted shares of both companies higher, with WBD gaining 4.2% and PSKY rising 2.3%.
However, Paramount denied these claims, calling the report “categorically inaccurate.” The company emphasized that the bidding process is confidential and stated it would refrain from commenting until the process concludes.
David Ellison-led Paramount Skydance has emerged as a leading early bidder in the Warner Bros. acquisition. The recently merged company reportedly 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. While all bidders are likely to face regulatory scrutiny for the merger, Paramount Skydance may encounter the least resistance.
Is PSKY Stock a Buy, Hold, or Sell?
Analysts remain cautious about Paramount Skydance’s long-term prospects due to challenges in integrating the Paramount Global-Skydance media merger and executing synergies.
On TipRanks, PSKY has a Hold consensus rating based on two Buys, eight Holds, and six Sell ratings. The average Paramount Skydance price target of $14.38 implies 10.6% downside potential from current levels. Year-to-date, PSKY stock has surged nearly 56%.
