Paramount Skydance is preparing a bid for Warner Bros. Discovery that could value the media company at $22 to $24 a share, CNBC's David Faber reported Friday, citing people familiar with the matter. The potential offer, which may take longer to materialize than initially expected, would be largely cash-backed and could reshape the media landscape.
Warner Bros. Discovery shares rose about 1.5% Friday morning to trade near $19 per share, extending gains after last week's report that Paramount Skydance was considering a bid. A successful deal would combine two major film studios and consolidate a wide portfolio of pay-TV networks and sports rights.
Faber said the offer could be 70% to 80% cash, supported in part by Oracle co-founder Larry Ellison, father of Paramount Skydance CEO David Ellison, with the remainder paid in stock. Other reports have suggested the stock portion could represent 20% to 30% of the overall deal value.
Warner Bros. Discovery has recently announced plans to separate its global television networks from its streaming business and studios, a move that could simplify a takeover. Investors see the potential merger as a preemptive step to prevent a breakup of Warner Bros. Discovery and to compete more effectively with Disney, Netflix and Amazon in the streaming and content wars.
