Discovery of Warner Bros. said Tuesday it was broadening its strategic review of the company and was open to a sale, which would send the company’s shares up 10% in morning trading.
Earlier this year, WBD announced plans to split into two separate entities, a streaming and studios business and a global networks business. It also attracted interest from newly merged companies. Paramount Skydance.
But on Tuesday, WBD said it had received “unsolicited interest” from multiple parties and would now consider all options. Meanwhile, the company said it is still moving toward the previously announced separation.
“We continue to make important strides to position our company for success in today’s evolving media landscape by advancing our strategic initiatives, returning our studios to industry leadership, and growing HBO Max globally,” CEO David Zaslav said in a statement. “We made the bold decision to prepare to separate the company into two separate, leading media companies, Warner Bros. and Discovery Global, because we believed it was the best path forward.”
“It is no surprise that the significant value of our portfolio is increasingly recognized by other market participants. After attracting interest from multiple parties, we launched a comprehensive review of strategic alternatives to identify the best path forward to unlock the full value of our assets,” he said.
Netflix And Comcast are among the interested parties, sources told CNBC’s David Faber.
WBD decided to publicly announce that it had received interest from multiple parties after rejecting several different offers from Paramount and an offer from another company that was higher than Paramount’s offer, according to a person familiar with the matter.
It’s unclear how serious potential deals outside of Paramount would be. Netflix was not interested in buying existing media assets, but did not want WBD to go to another low-cost buyer, a source familiar with the matter said.
Although Comcast doesn’t feel the need to make a deal, it will explore the possibility of pursuing WBD, sources close to the company told CNBC’s Julia Boorstin.
For any buyer who only wants WBD’s studio and streaming assets, acquiring them after a split later this year is preferable for tax purposes.
Spokespeople for Paramount and WBD declined to comment. Netflix and Comcast did not immediately respond to requests for comment.
WBD has faced growing financial challenges since the 2022 merger of WarnerMedia and Discovery Inc., which saddled the company with more than $40 billion in debt. Since then, the group has undertaken aggressive cost cuts, restructured its content pipeline and focused on profitable franchises like the “Harry Potter” and “Game of Thrones” spinoffs.
Although the company has made progress in reducing its debt, investors have remained skeptical, in part because of the company’s portfolio of cable networks, as consumers turn to streaming.
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC in Comcast’s planned spinoff of Versant.