Warner Bros. Discovery Soars as Paramount Launches $108B Hostile Bid
An all-cash offer of $30 per share seeks to upend a rival bid from Netflix, sparking a fierce bidding war for the global media and entertainment giant.
Warner Bros. Discovery (NASDAQ: WBD) has become the epicenter of a titanic struggle for media supremacy, as Paramount Global launched a hostile, all-cash tender offer to acquire the company for $30 per share. The unsolicited bid, which values WBD at an enterprise value of approximately $108.4 billion, was confirmed in a press release Tuesday morning and represents a direct challenge to a prior acquisition proposal from streaming leader Netflix.
Shares of Warner Bros. Discovery surged on the news, climbing toward the top of their 52-week range. The stock reached $29.12 in morning trading, a dramatic appreciation from levels prior to the M&A speculation. The current price is hovering just shy of the $30 offer price, signaling strong investor conviction that a sale of the company is imminent.
Paramount's move escalates a brewing battle for WBD's vast content empire, which includes Warner Bros. film and television studios, HBO, and the Max streaming service. The offer aims to usurp a previously reported deal from Netflix, which was focused on acquiring WBD's coveted studio and streaming assets for an enterprise value of $82.7 billion, a move that would have spun off WBD's linear networks as a separate entity.
The all-cash proposal from Paramount is structured as a tender offer made directly to shareholders, a classic hostile maneuver designed to bypass WBD's board if necessary. This puts immense pressure on the company's leadership, led by CEO David Zaslav, to deliver maximum shareholder value, a scenario complicated by the differing structures of the two bids.
"The situation has evolved from a strategic asset sale to a full-blown battle for the entire company," one analyst noted. "WBD's board is now in the position of weighing an offer for specific, high-growth assets against a potentially richer, all-cash offer for the whole enterprise, which brings both synergies and regulatory risks."
Warner Bros. Discovery has been seen as a potential acquisition target since its formation from the merger of WarnerMedia and Discovery, Inc. The company has been grappling with a significant debt load, which stood at over $33 billion as of the latest reporting period. While management has made progress in paying down debt and achieved profitability in its streaming segment, the pressure to gain scale in a competitive media landscape has been immense.
According to the company's investor relations page, management has focused on a strategy of maximizing the value of its intellectual property. That strategy now appears to have culminated in attracting two of the industry's largest players as suitors.
The market reaction underscores the perceived value of WBD's assets. The stock has rocketed past its 200-day moving average of $14.10 and has blown past the average analyst price target of $25.90. This bidding war has effectively forced a market-wide re-evaluation of the company's worth.
Either deal would face significant regulatory hurdles. A merger between Paramount and WBD, or an asset sale to Netflix, would concentrate immense content production and distribution power, likely triggering an extended antitrust review in Washington. Analysts project any such review could take 12 to 18 months, representing a significant risk for the acquiring party.
For now, all eyes are on the WBD board of directors. They must now formally review Paramount's unsolicited offer while continuing to engage with Netflix. Their decision will not only determine the future of a storied entertainment portfolio but could also reshape the competitive landscape of the global media industry for years to come.