Shares in Warner Bros Discovery (WBD) boomed on Tuesday after the media giant confirmed it may decide to sell its business. After confirming it would possibly split the company in two earlier this year, Warner Bros now says it has received interest from potential buyers for a buyout of the entire company. In an announcement on Tuesday, the entertainment and media giant said it had initiated a review of “strategic alternatives” in light of “unsolicited interest” it had received from multiple parties, for both the entire company and Warner Bros. specifically.
Shares climbed over 10% on Tuesday following the news, signaling investor interest in WBD possibly changing hands. While the names of the potential buyers remain unknown, interest from Paramount Skydance is already well-known. The Wall Street Journal recently reported that Paramount approached Warner Bros. Discovery about a majority-cash offer last month, but that Warner Chief Executive David Zaslav had rebuffed those first overtures. Netflix is another interested party, per CNBC, which didn’t name its sources for that information.
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Wall Street has responded positively to the potential WB sale. “Given the company’s wealth of premium IP (Harry Potter, DC, Lord of the Rings, Game of Thrones, etc.) and robust library, we continue to believe Warner Bros. is an extremely attractive potential acquisition target,” BofA Securities analyst Jessica Reif Ehrlich wrote in a note on Tuesday. Benchmark analyst Matthew Harrigan also raised the firm’s price target on Warner Bros. Discovery (WBD) to $25 from $18 and keeps a Buy rating on the shares
At $20.33, WBD is trading near the top of its 52-week range and above its 200-day simple moving average.