Warner Bros. Discovery (WBD) is currently reviewing strategic alternatives following unsolicited interest from multiple parties regarding both the entire company and its standalone Warner Bros. streaming and studios division. The media conglomerate made this announcement on Tuesday, signaling a potentially significant shift in the company’s direction.
While WBD did not disclose the identities of the companies that have expressed interest in mergers and acquisitions (M&A), the announcement comes in the wake of Paramount Skydance, led by chairman and CEO David Ellison, actively pursuing a major deal to acquire Warner Bros. Discovery in its entirety. Reports indicate that Warner Bros. Discovery recently rejected a $20-per-share offer from Paramount Skydance, which it deemed too low, igniting speculation about the company’s future.
Following the announcement, Warner Bros. Discovery's stock surged by more than 8% during early trading, approaching the $20 per share mark. This spike reflects investor confidence as the company navigates through its strategic review process and explores potential options.
In conjunction with this review, Warner Bros. Discovery is progressing with its planned separation of Warner Bros. and Discovery Global, which is expected to be finalized by April 2026. The board has initiated this comprehensive review to maximize shareholder value and will consider a variety of strategic options, including the potential sale of the entire company or separate transactions for its Warner Bros. and/or Discovery Global businesses.
As part of the strategic alternatives review, WBD will also evaluate different separation structures that might facilitate a merger of Warner Bros. with a third-party acquirer while enabling a spin-off of Discovery Global to its shareholders. This multifaceted approach aims to unlock the full value of the company’s assets in a rapidly evolving media landscape.
David Zaslav, president and CEO of Warner Bros. Discovery, emphasized the company’s commitment to adapting to the changing media environment. "We continue to make important strides to position our business for success by advancing our strategic initiatives, returning our studios to industry leadership, and scaling HBO Max globally," Zaslav stated. He acknowledged the increasing recognition of the company’s portfolio value by external parties, leading to the current review of strategic alternatives.
Samuel A. Di Piazza Jr., chairman of the Warner Bros. Discovery board, reiterated the board’s commitment to exploring all available opportunities to determine the best value for shareholders. He stated, "Our decision to initiate this review underscores the board’s commitment to considering all opportunities to determine the best value for our shareholders." Di Piazza also expressed confidence in the planned separation, believing it will create compelling value for both entities.
WBD has clarified that there is no specific deadline or "definitive timetable" for completing the strategic alternatives review process. While the separation transaction is already underway with a targeted completion date of April 2026, the company cautioned that there is no guarantee that this review will lead to a transaction or any other definitive outcome.
In its announcement, Warner Bros. Discovery indicated that it does not plan to provide further updates on the strategic alternatives review unless the board approves a specific transaction or finds it necessary to disclose additional information. To facilitate this review, WBD has enlisted the expertise of financial advisers Allen & Company, J.P. Morgan, and Evercore, while legal counsel is being provided by Wachtell Lipton, Rosen & Katz, and Debevoise & Plimpton LLP.
