Warner Bros. Discovery rejects $24-a-share takeover bid from Paramount Skydance: sources
News Summary
Paramount Skydance CEO David Ellison's $24-a-share, $57 billion takeover bid for Warner Bros. Discovery (WBD) has been rejected, marking the third rebuff. WBD CEO David Zaslav is actively shopping the company to multiple large media and tech outfits, including Netflix, Amazon, Comcast, Apple, and even Microsoft. WBD previously disclosed receiving "unsolicited interest" and expressed openness to a sale, which sent its stock soaring nearly 12%. Zaslav and his board believe the company is worth $30 a share or more, totaling over $70 billion. To preempt a potential public hostile takeover bid from Ellison at $26-$28 a share, WBD proactively announced its strategic review. WBD plans to spin off its top-ranked studio and HBO Max streaming service from its cable properties in April or May 2025. Ellison, backed by private equity firms Apollo and Redbird Capital, recently acquired Paramount in August 2025, but his father Larry Ellison's potential reluctance to fund the much larger WBD purchase might be limiting his bids.
Background
Warner Bros. Discovery (WBD), a media behemoth formed from the merger of WarnerMedia and Discovery, has been navigating the challenging transition from traditional media to streaming while managing a substantial debt load. CEO David Zaslav has focused on cost-cutting, asset integration, and optimizing its content offerings, including HBO Max. The media industry is undergoing significant consolidation, with both tech giants and traditional media companies seeking scale and synergies to survive and thrive in an increasingly competitive streaming landscape. David Ellison's Skydance Media, having acquired Paramount in August 2025, has emerged as an active player in this consolidation wave, with its interest in WBD signaling further industry reshuffling. Against this backdrop, WBD's board has authorized management to explore "strategic alternatives," including a full sale or divestitures, in a bid to maximize shareholder value and respond to unsolicited interest from multiple parties.
In-Depth AI Insights
What are the true motivations behind Zaslav's persistent rejection of lower bids and his simultaneous active shopping of WBD? - Zaslav's strategy goes beyond simply waiting for a higher offer. He is leveraging Ellison's sustained interest as a catalyst to orchestrate a bidding war for WBD, drawing in tech and traditional media giants to secure a premium valuation. - By announcing a review of "strategic alternatives" and preparing for a studio and streaming spin-off, he signals to the market that WBD is willing to break itself up to realize the intrinsic value of its individual parts, potentially exceeding an all-cash whole-company bid (a "sum-of-the-parts" strategy). - This proactive move also aims to preempt a hostile takeover from Ellison, forcing potential buyers to engage through negotiations rather than aggressive public bids, thus retaining WBD management's control over the deal terms. What are the implications of David Ellison's aggressive pursuit of WBD, especially given his recent Paramount acquisition and the potential for a hostile takeover? - Ellison is attempting to position Skydance as a major consolidator in the traditional media space, using private equity backing for aggressive expansion. A successful acquisition of WBD would create a new media behemoth with vast content libraries and distribution, fundamentally reshaping the industry landscape. - A potential vulnerability in Ellison's strategy lies in its financing structure, particularly the reported reluctance of his father, Larry Ellison, to fund the mega-deal. This might provide Zaslav with leverage to reject lower offers, knowing Ellison's financial ceiling might be lower than that of other interested tech giants. - Should Ellison fail to secure WBD, his broader ambitions for consolidation in the media sector could face significant challenges, potentially leaving WBD's assets to be carved up by more financially robust tech companies. How does the interest from tech giants like Netflix, Amazon, Apple, and Microsoft for WBD's assets reshape the long-term media landscape? - Tech companies view WBD's film studio, HBO, and vast intellectual property as strategic complements to their core ecosystems (e.g., cloud services, hardware sales, subscription services), not just as standalone media businesses. Acquiring WBD assets would bolster their competitive edge in content and enhance user acquisition and retention. - This interest highlights the increasingly blurred lines between traditional media and technology. The entry of tech giants brings immense capital and technological prowess, likely accelerating the digital transformation of the media industry and raising the bar for content production and distribution. - The ultimate fate of WBD's assets will determine the balance of power in media for years to come. If these assets are fragmented among several tech players, it could lead to greater content diversity but also intensified pressure on smaller, traditional media companies.