Warner Bros stock jumps 28% on news of possible takeover bid

Warner Bros Discovery (NASDAQ:WBD) was one of the day’s top movers on Thursday, surging some 28% higher on the news that it could be the target of a rival for acquisition.

The Wall Street Journal broke the story Thursday that Paramount Skydance (NASDAQ:PSKY) — the newly formed conglomerate born from the merger of Paramount and Skydance — is now looking to buy Warner Bros Discovery.

Warner Bros Discovery is undergoing its own transformation. In June, the company announced that it was splitting into two separate publicly traded companies. One, called Warner Bros., is made up of its streaming and studios properties, including Warner Bros. Motion Picture Group, DC Studios, Warner Bros. Television, HBO, and HBO Max, as well as its movie and TV libraries. The other, called Discovery Global, will consist of all of its television networks including CNN, TNT Sports, and Discovery, along with the Discovery+ streaming service and Bleacher Report.

The company targeted the split to be finalized in mid-2026. It was done to refocus the companies and give each more flexibility to grow. But analysts said it also makes the pieces, particularly the streaming and studios arm, more attractive for acquisition.

Paramount prepares a bid

The Journal article Thursday was about how one potential suitor, Paramount, is preparing a bid to buy the entire company – both Warner Bros and Discovery. The Journal noted that a bid had not yet been prepared as of press time.

It would be a majority cash offer “backed by the Ellison family,” the Journal stated, citing people familiar with the situation.

David Ellison is the chairman and CEO of Paramount. His father is Larry Ellison, the founder and chairman of Oracle, and the world’s second wealthiest person.

CNBC reported Thursday that a bid could be made as early as next week.

Last week, Bloomberg reported that Warner Bros. Discovery was considering selling a 20% stake in its studio and streaming business before the 2026 split. “We want to get full value for it,” WBD CFO Gunnar Wiedenfels said at the Bank of America Media, Communications & Entertainment Conference, per Bloomberg. “We’ve had some interest in discussions,” the WBD CFO reportedly said, according to the Fly, via Bloomberg.

Netflix among other potential bidders

Analysts at Wells Fargo said there could be other meia companies lining up to get a piece of Warner Bros.

“WBD’s Streaming & Studios could be an attractive M&A candidate, and our list of potential buyers implies a lofty valuation,” analysts at Wells Fargo said, reported Investing.com.

The firm valued the company at about $65 billion, or over $21 per share.

Wells Fargo sees Netflix (NASDAQ:NFLX) as the “most compelling buyer.” Other possibilities are Amazon, Apple, Comcast, Sony, and Paramount. But Wells Fargo sees regulatory hurdles and other potential constraints for most of these players. It placed the odds of a deal somewhere in the range of 30% to 75%.

Warner Bros Discovery stock jumped 28% Thursday and is trading at $16 per share. Paramount stock jumped about 14% on the day to $17 per share.