Warner Bros Discovery Inc (NASDAQ:WBD) shares are trading higher on Friday after the company initiated a strategic review to maximize shareholder value, with The Wall Street Journal reporting that Paramount Skydance Corp (NASDAQ:PSKY), Comcast Corp (NASDAQ:CMCSA) and Netflix Inc (NASDAQ:NFLX) are preparing bids.
What Happened: The strategic review was initiated by Warner Bros’ board of directors following the interest of multiple parties’ unsolicited interest, according to the Wall Street Journal. The company is considering a wide range of options, such as a deal for the entire business and separate agreements for its Global Networks business, which includes cable holdings like CNN, TNT and Discovery Channel, or its Streaming & Studios business.
The initial deadline for nonbinding first-round bids is reportedly Nov. 20, with the company hoping to complete the auction process by year-end.
The Ellison family, which includes Oracle Corp (NYSE:ORCL) co-founder Larry Ellison, and private equity firm RedBird Capital Partners support Paramount’s bid.
Warner Bros is moving forward with its plans to divide its assets into two businesses: one that will house its studios and streaming services, and the other that will include cable networks. The business recently made it clear that change-in-control clauses in CEO David Zaslav‘s employment contract won’t apply to some internal restructuring transactions necessary for strategic alternatives.
WBD Analyst Ratings
Wells Fargo recent analyst rating for WBD reaffirmed an Equal-Weight status, increasing the target from $21.00 to $25.00 on Nov. 7, following multiple upgrades for the company. On Oct. 30, Rothschild & Co moved WBD from Neutral to Buy and set a $28.00 target price. Argus Research also upgraded the company to Buy from Hold on Oct. 28, setting a target of $27.00.
Further positive actions were seen from Barrington Research and Benchmark in October. Barrington maintained an Outperform rating for WBD and upped the target from $16.00 to $25.00 on Oct. 28. Similarly, Benchmark maintained a Buy rating and increased the target from $18.00 to $25.00 on Oct. 22.
WBD Price Action: Warner Bros Discovery shares were up 3.79% at $22.98 at the time of publication on Friday. The stock is trading near its 52-week high of $23.19, according to Benzinga Pro.
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