TLDR
- Paramount Skydance denied a Variety report claiming the company was preparing a $71 billion bid for Warner Bros Discovery backed by Middle Eastern sovereign wealth funds
- Warner Bros Discovery shares rose 5.5% and Paramount shares increased 2% after the initial report before the denial was issued
- The Variety report claimed Saudi Arabia’s Public Investment Fund, Qatar Investment Authority, and Abu Dhabi Investment Authority would each contribute $7 billion with Paramount fronting $50 billion
- Warner Bros Discovery has been exploring strategic options including separation or sale of its business units, with a first-round bid deadline of November 20
- Comcast and Netflix have also reportedly explored bids for Warner Bros Discovery assets as the company faces challenges in its television business
Warner Bros Discovery stock jumped Tuesday following a report about a major acquisition bid. The rally was short-lived after Paramount issued a strong denial.
Warner Bros. Discovery, Inc., WBD
Paramount Skydance called the Variety report “categorically inaccurate.” The company stated it would not comment further on what it described as a confidential process.
The original Variety report claimed Paramount was forming an investment consortium. The group allegedly included sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi.
According to the report, the total bid would reach $71 billion. Each Middle Eastern fund would contribute $7 billion for a combined $21 billion. Paramount Skydance would front the remaining $50 billion.
Warner Bros Discovery shares rose 5.5% following the initial report. Paramount stock climbed about 2% before the denial was released.
The Variety report cited sources claiming the Ellison family would largely back the bid. David Ellison recently became Paramount CEO. His father Larry Ellison co-founded Oracle and ranks as the world’s second richest person.
Warner Bros Discovery Explores Strategic Options
Warner Bros Discovery announced in October it was considering various strategic paths. Options include a planned separation, a sale of the entire company, or separate deals for Warner Bros or Discovery Global businesses.
The company owns major entertainment properties. Its portfolio includes the DC film universe, HBO, CNN, TNT, and Warner Bros Games. It also operates television studios across multiple markets.
The media giant faces pressure from declines in its television business. These challenges have pushed the company toward a potential breakup.
The first-round bid deadline falls on November 20. Multiple companies have shown interest in Warner Bros Discovery assets.
Other Potential Buyers Emerge
Comcast and Netflix have explored bids for Warner Bros Discovery properties. Reuters previously reported on their interest in the company’s assets.
The Variety report suggested wealth funds would receive benefits from the deal. Each fund would get “an IP, a movie premiere, a movie shoot” according to unnamed sources.
Warner Bros Discovery did not respond to requests for comment. The Public Investment Fund, Qatar Investment Authority, and Abu Dhabi Investment Authority also remained silent.
Paramount emphasized the confidential nature of any ongoing process. The company stated it would only comment after the process concludes.
Stock movements reflected initial market excitement about a potential mega-deal. The denial from Paramount created uncertainty about Warner Bros Discovery’s sale timeline.
The November 20 deadline remains in place for interested bidders. Warner Bros Discovery continues to evaluate options for its future structure.
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