Shares of Warner Bros. Discovery (WBD) experienced a remarkable increase for the second consecutive session on Friday, fueled by reports that rival Paramount Skydance (PSKY) is preparing to make a takeover bid for the media giant. The Wall Street Journal was the first to break the news, highlighting that the potential deal is backed by the influential Ellison family. Notably, David Ellison serves as the CEO of Paramount Skydance, while his father, Larry Ellison, is the co-founder of Oracle (ORCL) and a well-known billionaire.
According to the Wall Street Journal, Paramount’s bid would predominantly be in cash and is intended to encompass all of Warner Bros. Discovery, which includes its extensive portfolio of cable networks and its esteemed movie studio. However, the report also cautioned that no formal offer has been made yet, and the plans may still unravel before any agreement is reached.
The announcement triggered a significant market response, with shares of Warner Bros. Discovery closing 29% higher on the day of the initial report. The momentum continued, as the stock gained an additional 10% shortly after the opening bell on Friday. Meanwhile, shares of Paramount Skydance also saw a positive reaction, advancing more than 3% during Friday morning trading. Both companies have shown considerable growth this year, reflecting investor optimism.
In June, Warner Bros. Discovery announced its plans to split into two distinct entities: one focusing on its studios and the HBO Max streaming service, while the other would manage its cable channels, including well-known networks like CNN and TNT. The Wall Street Journal noted that this strategic move by Paramount is aimed at preempting a potential bidding war for valuable studios and streaming services, further intensifying the competition in the media landscape.
The unfolding situation surrounding Warner Bros. Discovery and Paramount Skydance is one to watch closely, as it could reshape the dynamics within the media industry. Investors and analysts alike will be keen to see how this potential takeover bid develops and what it could mean for the future of both companies.
