Warner Bros. Discovery says it is open to a sale; shares leap 10%

Warner Bros. Discovery mentioned Tuesday it is increasing its strategic overview of the enterprise and is open to a sale, sending shares of the corporate 10% increased in morning buying and selling.

Earlier this yr, WBD introduced plans to break up into two separate entities, a streaming and studios enterprise and a worldwide networks enterprise. It is also been fielding takeout curiosity from the newly merged Paramount Skydance.

However on Tuesday, WBD mentioned it is acquired “unsolicited curiosity” from a number of events and can now overview all choices. The corporate mentioned it is nonetheless shifting towards the beforehand introduced separation within the meantime.

“We proceed to make essential strides to place our enterprise to reach as we speak’s evolving media panorama by advancing our strategic initiatives, returning our studios to trade management, and scaling HBO Max globally,” CEO David Zaslav mentioned in an announcement. “We took the daring step of making ready to separate the Firm into two distinct, main media firms, Warner Bros. and Discovery World, as a result of we strongly believed this was the very best path ahead.”

“It is no shock that the numerous worth of our portfolio is receiving elevated recognition by others out there. After receiving curiosity from a number of events, we’ve initiated a complete overview of strategic options to establish the very best path ahead to unlock the total worth of our property,” he mentioned.

Netflix and Comcast are among the many events, sources advised CNBC’s David Faber.

WBD determined to publicly announce it has had curiosity from a number of events after rejecting a number of totally different bids from Paramount and a proposal from one other firm that was increased than the Paramount bid, in accordance with an individual acquainted with the matter.

It’s unclear how severe potential affords outdoors of Paramount can be. Netflix was not all for shopping for legacy media property, however did not need WBD to go to a different purchaser at a low value, a supply acquainted with the matter mentioned.

Whereas Comcast doesn’t really feel the necessity to do a deal, it should have a look at the potential for pursuing WBD, sources near the corporate advised CNBC’s Julia Boorstin.

For any purchaser that simply needs WBD’s studio and streaming property, buying them after a break up later this yr is healthier for tax functions.

Paramount and WBD spokespeople declined to remark. Netflix and Comcast didn’t instantly reply to requests for remark.

WBD has confronted mounting monetary challenges because the 2022 merger of WarnerMedia and Discovery Inc., which saddled the corporate with greater than $40 billion in debt. It has since undertaken aggressive value chopping, restructured its content material pipeline and targeted on worthwhile franchises like “Harry Potter” and “Sport of Thrones” spinoffs.

Although the corporate has made progress in debt discount, traders have remained skeptical partially due to the corporate’s cable community portfolio as shoppers transfer towards streaming.

Disclosure: Comcast is the father or mother firm of NBCUniversal, which owns CNBC. Versant would change into the brand new father or mother firm of CNBC upon Comcast’s deliberate spinoff of Versant.