WBD Surges as Paramount Ignites Bidding War with $74 Billion Bid
The hostile all-cash $30-per-share offer aims to derail a prior agreement with Netflix, signaling a fierce battle for the media giant's streaming assets and content library.
Shares of Warner Bros. Discovery (NASDAQ: WBD) soared in morning trading after Paramount Skydance launched a hostile, all-cash takeover bid for the media conglomerate at $30 per share, valuing the company at approximately $74.3 billion.
The unsolicited offer intensifies a battle for control of one of Hollywood's most storied portfolios, directly challenging a prior, smaller agreement with Netflix to acquire only parts of the company. The move signals the start of a potentially lengthy and competitive bidding war, putting WBD's board in the difficult position of navigating multiple suitors in a rapidly consolidating industry.
Investors reacted swiftly to the news, sending WBD stock surging over 24% to trade just shy of the offer price at $29.50, a new 52-week high. The $30 per share cash offer represents a substantial 26% premium over Wall Street's average analyst price target of $23.74, a level designed to appeal directly to shareholders.
The aggressive bid from Paramount comes as Warner Bros. Discovery continues to navigate the financial fallout of its own blockbuster merger in 2022. The company has been aggressively paying down a massive debt load that stood at roughly $40 billion at the end of last year. While grappling with revenue declines in its traditional linear television networks, WBD has found significant success with its flagship streaming service, Max. The platform recently turned profitable and has shown robust subscriber growth that has, at times, outpaced its rivals, making its streaming division a coveted prize.
In a clear challenge to its streaming rival, Paramount's move aims to scuttle a previously reported agreement with Netflix, which was valued at an estimated $27.75 per share but for only a portion of WBD's assets. By launching a hostile bid for the entire company, Paramount is forcing the issue. An official press release stated, "Paramount Launches All-Cash Tender Offer to Acquire Warner Bros. Discovery for $30 Per Share," making its intentions public and placing immense pressure on the WBD board to act.
A combined Paramount and Warner Bros. Discovery would create a media titan with an unparalleled content library, uniting franchises like HBO's 'House of the Dragon,' the DC Comics universe, and 'Mission: Impossible' under one roof. The strategic rationale would be to combine the Max and Paramount+ streaming services to create a more formidable competitor to Netflix and Disney+. However, such a mega-merger would undoubtedly face intense scrutiny from antitrust regulators in the Department of Justice, who have become increasingly skeptical of large-scale industry consolidation.
The development forces Warner Bros. Discovery's leadership, which was reportedly exploring its own internal restructuring, to pivot. The WBD board now has a fiduciary duty to evaluate the unsolicited proposal. According to a report from The Guardian, the hostile nature of the bid is intended to accelerate the sale process and prevent WBD from pursuing alternative transactions.
The ball is now in two courts. The Warner Bros. Discovery board must deliver a formal recommendation to its shareholders on whether to accept the tender offer. Simultaneously, all eyes are on Netflix to see if it will counter-bid with a superior, all-company offer or abandon its pursuit. For WBD shareholders, the escalating conflict is a welcome development, as a bidding war is likely to drive the final acquisition price even higher. Yet, the path forward is clouded by significant regulatory risk and the potential for a protracted corporate battle.