People familiar with the matter reported that Paramount Skydance, Comcast, and Netflix have formally made takeover bids of Warner Bros. Discovery before a deadline for first-round offers.
They reported that the parent company of NBCUniversal, Comcast, only bid upon the film and streaming holdings, which include the Warner Bros. studio and HBO Max.
People also stated that the offer would make NBCUniversal the parent of the WBD assets and would not entail a spinout of NBCUniversal as some in the industry had conjectured.
Currently, Comcast is going through spinning out of its portfolio of cable networks, which includes CNBC, but will not spin off NBCUniversal.
The business unit will only feature the broadcast network NBC, streaming service Peacock, Universal film studio, and theme parks by January.
The people familiar with the matter said that the offer by Comcast had a provision that would enable WBD to spin off its own cable networks, such as CNN and TNT Sports, at any time before the proposed acquisition closing.
Recently, Comcast President and soon-to-be co-CEO Michael J. Cavanagh telegraphed in an earnings call that the acquisition of a studio and streaming property would complement NBCUniversal.
Cavanagh also indicated that the company feels that there would be a “viable” deal in the current regulatory environment. It was reported that, similar to Comcast, Netflix also made only film and streaming asset bids.
Therefore, Paramount Skydance had again submitted its fourth to date. Some of the people reported that in recent days, Paramount Skydance and its advisors are considering whether to offer a higher price than its earlier offer of $23.50 a share, which WBD had declined.
They also reported that Netflix was supposed to be “disciplined” on its bids. Information on the size of each of the three offers was not immediately evident.
It was reported that Warner Bros. Discovery had informed the bidders that it had received the offers and would be getting back in touch with them in the near future.
Meanwhile, the representatives of Warner Bros. Discovery, Paramount, Netflix, and Comcast did not comment immediately on the matter.
CNBC previously reported that Warner Bros. Discovery intends to complete its sale by mid- to late-December. There will come another round of bids in the coming weeks.
Warner Bros. Discovery announced last month it was broadening a strategic review of its operations to incorporate a possible sale, even as it pursues a plan to separate into two distinct organizations: Warner Bros, consisting of the film studio and streaming platform, and Discovery Global, which would consist of the pay TV networks of the company.
Although the separation of Warner Bros. Discovery has been ongoing, takeover interest by the newly merged Paramount Skydance made WBD CEO David Zaslav and the top brass open up to a formal sales process.
If the offer for the studio and streaming assets were to be successful, Discovery Global would begin with its spinout, and current WBD CFO Gunnar Wiedenfels would become CEO.
The paramount has already submitted several letters to the board of WBD stating why its offer of $23.50 per share of all the assets of WBD is in the best interest of the shareholders and the company itself.
The WBD’s stock surged 1 percent to end the day at $23.19 per share on Friday. This has seen the company strengthen its share price by more than 20 percent since it announced that it was for sale in October.
People familiar with the matter reported that Saudi-backed sovereign funds have recently discussed with Paramount CEO David Ellison on funding a possible transaction, but the talks were merely about whether Ellison and his father, co-founder of Oracle Larry Ellison, are willing to entirely fund a transaction.
Although Paramount would want to get the deal of the whole of WBD, the formal sale procedure has created the possibility of a buyer of only a section of the legacy media firm.
