The bidders for Warner Bros. Discovery have each submitted their second-round bids as details continue to emerge about their plans.
Paramount, which is the only company said to be looking to acquire the company in its entirety, has issued an all-cash bid that is backed by Oracle founder Larry Ellison’s family in addition to debt financing from Apollo Global Management and three Middle East sovereign wealth funds, according to numerous reports.
The all-cash bid comes after an earlier play that was reported as having included 80% cash and 20% stock. But per Lucas Shaw of Bloomberg, cash is a higher priorty for WBD than stock. The company is reportedly looking for $30/share as it sits with a market capitalization of over $60 billion.
It remains unknown if TNT Sports would continue to exist as its own standalone entity if Paramount were to acquire Warner Bros. Discovery in full. The companies have collaborated on a joint production of the NCAA Division I Men’s Basketball Tournament since 2011. TNT Sports has plans to launch its own standalone streaming app once its content becomes unavailable on HBO Max, likely sometime next year.
As previously noted, neither of the two other bidders — Comcast and Netflix — are interested in the cable networks, which are set to be spun off (along with the majority of WBD’s debt) into Discovery Global, a new publicly-traded company headed by current WBD CFO Gunnar Wiedenfels. Instead, both are bidding only for the streaming and studios division, which will be named “Warner Bros.” and consist of the eponymous movie studio and HBO Max streaming platform.
Comcast submitted a bid Monday that would merge NBCUniversal with Warner Bros., according to Michelle F. Davis, Thomas Buckley and Kelcee Griffis of Bloomberg. WBD shareholders would acquire a combination of cash and stock in the venture, and WBD CEO David Zaslav has reportedly been offered a management role. A transaction with Comcast “remains a preferred option” for him, per Shaw.
Netflix has issued a primarily cash-based bid to Warner Bros., according to Joe Flint, Lauren Thomas and Dave Michaels of The Wall Street Journal. Multiple reports indicated that Netflix is looking to secure several billion dollars in financing to fund the purchase, with Bloomberg describing it as “a bridge loan.”
All of these offers have been described as “binding,” though Shaw said that the Monday due date for second-round bids was not a deadline to submit “a last-and-final offer.” The WBD board could look to quickly close a deal as the company aims to announce its future plans by Christmas, per Alex Sherman of CNBC.
Sherman added in his report, filed in early November, that Paramount could explore taking a hostile bid for WBD directly with shareholders if the company “stalls in its decision or decides to move in a different direction.” Skydance Media merged with Paramount Global upon receiving federal regulatory approval in August as part of a two-step transaction valued at over $8 billion.
