A Bidding War Erupts for Warner Bros. Discovery

Warner Bros. Discovery (A) US9344231041

The landscape for Warner Bros. Discovery (WBD) has shifted dramatically with the emergence of a surprise, unsolicited cash bid. Paramount Skydance has submitted a hostile takeover offer, proposing to acquire the entire company for $30.00 per share. This move directly challenges a previously announced strategic transaction with Netflix and has placed WBD's board of directors in a pivotal evaluation phase.

The board has confirmed receipt of the Paramount Skydance proposal and has advised shareholders to take no immediate action while it conducts a review. This new offer complicates the existing plan, under which Netflix had agreed to acquire WBD's streaming and studio divisions—including HBO, HBO Max, and Warner Bros. Studios. That deal carried an implied value of $27.75 per share, structured as a combination of cash and stock, and was contingent on the planned spin-off of WBD's Global Networks unit by the third quarter of 2026.

In stark contrast, Paramount Skydance's all-cash bid of $30.00 per share targets the whole enterprise, thereby encompassing linear television assets such as Discovery Channel and CNN. Paramount has emphasized that its proposal offers greater certainty to shareholders through immediate liquidity and claims a potentially smoother regulatory path. Meanwhile, political reservations expressed in some quarters regarding the Netflix transaction have introduced additional uncertainty over its regulatory approval process.

Market Response and Strategic Crossroads

Trading in WBD shares has reflected the heightened volatility surrounding these developments. The stock recently closed at €25.22, marking a 52-week high. Since the start of the year, the share price has surged by 142.45%. Technical indicators show a Relative Strength Index (RSI) of 76.5 and a 30-day volatility reading of 36.46%.

Key Data Points:
* Paramount Skydance Offer: All-cash bid of $30.00 per share, representing an enterprise value of approximately $108.4 billion.
* Netflix Agreement: Implied price of $27.75 per share, with an equity value around $72.0 billion and an enterprise value near $82.7 billion. This deal remains dependent on the successful spin-off of the Global Networks division.
* Board Timeline: WBD's board is expected to provide its formal recommendation on the Paramount offer within ten business days of its receipt.
* Regulatory Overhang: Comments from former government circles suggesting potential antitrust concerns have increased the perceived regulatory risk for the Netflix deal.

Market participants are weighing the distinct advantages of each proposal. The Paramount bid presents a higher, definitive cash payout. The Netflix arrangement, while carrying a lower implicit value and structural complexities, promises strategic synergies for the streaming leader and a focused corporate restructuring for the remainder of WBD.

The Path Forward

The immediate and measurable milestone is the forthcoming decision from the WBD board within its stated ten-business-day window. Concurrently, competition authorities will scrutinize both potential transactions. Should the board reaffirm its support for the Netflix deal, that transaction would still hinge on the completion of the Global Networks separation and securing regulatory clearance. If the board changes its recommendation, Paramount Skydance could potentially revise or negotiate its offer further. The resolution of these specific factors in the coming weeks will be decisive for both the stock's trajectory and the strategic future of the company.