Key Points
- WBD could put itself up for sale as soon as late December, according to a report.
- The company is weighing unsolicited offers from a number of parties, including Paramount.
- Paramount executives have signaled a willingness to a hostile takeover bid of WBD if their offers continue to be rejected.
Executives at Warner Bros Discovery (WBD) are likely to offer additional insight to Wall Street and the public about the long-term fate of their company by as soon as late December, according to a report published on Wednesday.
The report, from CNBC, comes several months after WBD affirmed plans to separate its cable networks unit from its more-lucrative film production and streaming businesses, a move that is now doubtful amid unsolicited takeover offers from Paramount and others in the industry.
Last month, WBD executives said they were exploring a number of those offers, with Paramount’s being the most-aggressive. The company has rejected numerous offers from Paramount over the past few weeks, feeling those offers undervalued its assets. The Paramount offers are said to be for the entirety of WBD, a move that would keep the film, streaming and cable network assets together.
WBD is still moving forward with its spin-off plans, but executives are likely to reveal that the company is open to an acquisition, CNBC reported, citing people familiar with the matter. The company is hoping to make a definitive announcement before Christmas Day, the financial outlet said.
A sale of the company could be predicated on WBD’s initial intention to sever parts of its business. From a tax perspective, spinning out the cable networks, and then selling one or both parts of the company to one or more parties, would be more-advantageous than keeping the company intact and selling it as a whole, the outlet reported. Selling parts of the business to different companies would also ease antitrust and other regulatory concerns.
Selling the company in parts could also invite more-lucrative offers from other companies. Apple, Comcast and Netflix are reportedly among the parties who have expressed interest in some of WBD’s assets over the past few weeks. A few of those companies are mainly interested in WBD’s intellectual property, and do not see long-term value in buying the cable networks or. Comcast and Netflix have considered buying WBD’s studio business for its intellectual property, in a deal that would not also encumber them with less-lucrative cable networks like CNN, the Discovery Channel, Cartoon Network and Animal Planet.
Paramount is holding out hope that it will emerge the victor for the entirety of WBD, and executives from both sides continue to engage in discussions on the matter, CNBC said. If Paramount gets frustrated with WBD’s unwillingness to strongly consider or accept an offer, the media giant may decide to take its offer directly to shareholders, a move that would set the stage for a hostile takeover, the outlet reported.
