Warner Bros. Discovery Inc (NASDAQ: WBD) is extending gains on Monday morning following reports that Paramount Skydance is willing to pay a massive premium to acquire the mass media giant.
The potential acquisition comes as WBD prepares to split its streaming and studio operations from global TV networks.
If successful, the deal will unite two major Hollywood studios and a sprawling portfolio of cable networks and sports rights under one roof.
WBD shares have been in a sharp uptrend over the past five months. Including recent gains, the entertainment conglomerate is up more than 150% versus its year-to-date low in early April.
How much is Paramount Skydance willing to pay for WBD stock
According to CNBC, Paramount Skydance could value Warner Bros. Discovery shares at as much as $24, indicating a more than 20% premium on the current price.
For shareholders, this could mean swift upside – especially since the transaction could be “70% to 80% cash.” CNBC also suggested that the WBD deal will be backed in part by Oracle’s co-founder Larry Ellison.
In short, if Paramount Skydance does come forward with a formal bid for Warner Bros.
Discovery, the latter’s shareholders could see a short-term rally and long-term strategic value from being part of a larger, more diversified media empire.
However, CNBC’s David Faber did emphasize that the aforementioned figures are speculative, and the timing of the expected proposal remains uncertain.
Why may Warner Bros. Discovery shares be valued at a premium
As is evident, Paramount Skydance is willing to pay a significant premium for WBD shares, and the rationale behind it is clear: Warner Bros. Discovery offers scale, content depth, and global reach.
WBD acquisition will bring Paramount Skydance access to a treasure trove of intellectual property – from HBO’s prestige programming to Warner Bros.’ blockbuster franchises.
In fact, the deal would also consolidate sports broadcasting rights and cable networks like CNN and Discovery Channel, creating a formidable competitor even to the likes of Disney and Netflix.
With WBD planning to split its business units – Paramount Skydance could swoop in before the separation, securing synergistic assets at once.
Meanwhile, the backing of Larry Ellison adds financial muscle, signaling confidence in the long-term value of the combined entity.
Are WBD shares worth buying today?
Those interested in building a position in Warner Bros. Discovery Inc. in hopes of benefiting from Paramount Skydance’s expected bid should note that the timeline for such a deal remains fluid.
CNBC’s Faber cautioned that the offer may arrive later than expected, and regulatory hurdles could complicate the path further.
That said, the market sure is watching closely. A successful bid would not only boost WBD stock valuation but also trigger a wave of consolidation across the media sector.
For investors, the key will be monitoring how much of the offer is cash, how regulators respond, and whether competing bids emerge. If Paramount Skydance pulls it off, WBD shares may just be beginning their climb.
The post How high could WBD stock soar on potential Paramount-Skydance deal? appeared first on Invezz