Warner Bros. Discovery shares soared over 9% on Tuesday morning as the media giant revealed its launching a review of strategic alternatives.
Those include continuing on with its split into Warner Bros. and Discovery Global, which is on track for completion in April, separate transactions for those two companies, or a deal for the entire combined company. WBD also said it would consider an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to its shareholders.
There is no deadline or definitive timetable set for this review process. The company noted that it does not intend to make any further announcements about this review until the board approves a specific transaction or determines that further disclosure is necessary.
Allen & Company, J.P. Morgan and Evercore are serving as financial advisors to Warner Bros. Discovery and Wachtell Lipton, Rosen & Katz and Debevoise & Plimpton LLP are serving as legal counsel.
The review comes after news broke last month that Paramount was considering a bid to acquire all of Warner Bros. Discovery. The initial offer was reportedly valued at $20 per share and rejected by WBD’s board. CNBC’s David Faber also said on Tuesday that both Comcast and Netflix have expressed interest in parts of the company.
“Our decision to initiate this review underscores the Board’s commitment to considering all opportunities to determine the best value for our shareholders,” WBD board chairman Samuel Di Piazza, Jr., said in a statement. “We continue to believe that our planned separation to create two distinct, leading media companies will create compelling value. That said, we determined taking these actions to broaden our scope is in the best interest of shareholders.”
WBD, whose market cap currently sits at around $49 billion, has seen its stock climb more than 164.8% in the past year, 87.5% year to date, 151.7% in the past six months and 9.4% in the past five days. But shares are down 5% in the past five years and its share price of $19.96 remains below the $24.78 apiece when WBD first started trading in 2022.
