Warner Bros. Discovery Rejected Paramount Skydance Acquisition Offer of $20 per Share as Too Low (Report)

Warner Bros. Discovery turned down a takeover proposal of approximately $20 per share from David Ellison’s Paramount Skydance recently, deeming it “too low,” as reported by Bloomberg News on Saturday, citing unnamed insiders.

WBD’s stock closed at $17.10 per share on Friday, reflecting a more than 36% increase since the news broke on September 11 about Ellison’s interest in acquiring the competing firm, just weeks following Skydance’s conclusion of its acquisition deal for Paramount Global. Warner Bros. Discovery, which oversees HBO/HBO Max, Warner Bros. Entertainment, CNN, TNT, TBS, and additional brands, holds a market capitalization of $42.3 billion. The Bloomberg article did not clarify whether Paramount’s offer encompassed the assumption of WBD’s total debt, which was reported at $35.6 billion as of June 30.

Following the news, Paramount Skydance has reportedly been in discussions with Apollo Global Management, the investment firm that had previously shown interest in acquiring Paramount Global, regarding a potential joint bid for Warner Bros. Discovery, according to Bloomberg. Larry Ellison, the Oracle founder and David Ellison’s father, provided substantial funding for Skydance’s $8 billion acquisition of Paramount Global.

Representatives from Paramount, WBD, and Apollo did not reply to requests for comments on Sunday.

Last week, Ellison spoke at the Bloomberg Screentime conference in Los Angeles, where he did not confirm that Paramount Skydance had made a bid for WBD. Nonetheless, he emphasized the necessity for Paramount to incorporate more content production capabilities to support sustainable growth in the current streaming era, referencing WBD CEO David Zaslav’s assertion about the industry’s need for further consolidation.

“I believe there are numerous [M&A] opportunities available that might be feasible in the near term,” Ellison stated during the event. “To generate increased engagement, more content is essential. Our objective is to expand our footprint by producing ‘more movies, more television series’ to enhance scalability and engagement.” Ellison opted not to specify any potential acquisition targets.

Paramount Skydance’s intention to acquire Warner Bros. Discovery entails taking over the entirety of WBD, as first reported by the Wall Street Journal. This M&A initiative arrives ahead of WBD’s plans to split into two distinct companies next spring (Warner Bros., which will focus on studios and streaming, and Discovery Global, which will include television networks and Discovery+).