According to Reuters, Netflix has enlisted the investment bank Moelis and Co. as the streamer considers a bid for the studio and streaming business of Warner Bros. Discovery.
The outlet reported, citing three anonymous sources, that the company also purportedly has been aided with access to the data room of Warner Bros. Discovery to examine the financial information that might be required to make an offer.
Therefore, the Warner Bros. Discovery and Moelis representatives refused to comment. Netflix representatives did not respond to TheWrap as soon as they received the request to comment.
The stock of Netflix has surged by 3.2 percent in after-hours trading on Thursday, whereas the stock of WBD is rising by 3.3 percent.
The most recent update follows the release of a strategic review by Warner Bros. Discovery last week, “unsolicited interest” from “multiple parties” for all or part of the company.
Besides proceeding with its intended division into Warner Bros. and Discovery Global, which is scheduled to be completed in April, the company board will also contemplate individual transactions between the two companies or an agreement for the entire combined company.
WBD also declared it would look at an alternative separation structure that would permit a merger of Warner Bros. and spin-off of Discovery Global to its shareholders.
During the third-quarter earnings call, Netflix Co-CEO Ted Sarandos once again reaffirmed that the company has “no interest” in acquiring legacy media networks, but opined that the company is of the view that it will and can be “choosy” when it comes to M&A.
He reported that “It’s true that historically, we’ve been more builders than buyers, and we think we have plenty of runway for growth without fundamentally changing that playbook. Nothing is a must-have for us to meet our goals that we have for the business. But we focus on profitable growth and reinvesting in our business, both organically and through selective M&A. And when it comes to M&A opportunities, we look at them, and we look at all of them.”
Co-CEO Greg Peters said, “It’s our responsibility to look at every significant opportunity. We’ve got a clear framework to evaluate those opportunities, and we’ll do whatever we think is best to grow the business.”
Besides Netflix, Comcast has also been mentioned as a potential acquirer of the studio and streaming business of WBD.
Comcast President Mike Cavanagh stated that the company’s bar for M&A is “very high” and its existing strategies are “really sound and durable without M&A.”
However, he also noted that the company would also consider “look at things that are trading in the space around our industry” and determine how the company can add value, implying that the company would be receptive to WBD’s studio and streaming assets once the company spins off its cable network portfolio to Versant.
Previously, Experts reported TheWrap that, although a Comcast bid to buy Warner Bros. is strategic, it would not have an easy time getting regulatory approval under the Trump administration and outbidding the deep wallets of the Ellison family, which has been actively bidding to acquire all of the company.
In the response to the question on the viability of a bid, Cavanagh noted that he believes “more things are viable than maybe some of the public commentary that’s out there.”
