Warner Bros. Stock on Track for Best Day Ever on Report Paramount Is Prepping Bid

Warner Bros. stock jumped on report of Paramount preparing a takeover bid. (Eric Thayer/Bloomberg)

Key Points

About This Summary

• Warner Bros. Discovery stock is soaring after a report that Paramount Skydance is preparing a takeover bid.
• Paramount Skydance is looking to make a majority cash bid to buy the entire Warner Bros. company.
• Warner Bros. shares were surging 27% and Paramount stock also jumped on the report.

Warner Bros. Discovery stock was soaring Thursday afternoon after The Wall Street Journal reported that Paramount Skydance is preparing a takeover bid for the entertainment company.

Paramount Skydance is looking to make a majority cash bid to buy the entire Warner Bros. company, The Journal reported on Thursday, citing people familiar with the matter.

Paramount Skydance has a market capitalization of $17.79 billion, less than half that of Warner Bros, the company it is reportedly looking to buy, at about $39.35 billion.

Warner Bros. and Paramount didn’t immediately respond to requests for comment.

Seaport analyst David Joyce rates Warner Bros. as a Buy with a $15 price target. He wrote in a note Thursday that the potential acquisition “highlights the value of WBD’s IP generation capability.”

Joyce pointed to a solid year of theatrical releases from Warner Bros., including Sinners, Superman, and F1: the Movie. He also said that the acquisition highlights the company’s “continued prolific episodic programming production, the global growth opportunity set for the HBO Max service, and the linear networks’ cash generation that should drive robust debt reduction.”

Shares of Warner Bros. were up 27% to $15.92, on pace for their largest percentage increase ever, according to Dow Jones Market Data. The stock was the best performer in the S&P 500.

Paramount stock also jumped on the report. Shares gained 14% to $17.12.

Both companies are going through big changes.

Warner Bros. announced in June that it is separating into two publicly listed entertainment companies. The streaming and studios company will consist of its movie studios and HBO Max streaming platform, while the other will include cable channels like CNN.

The Journal reported on Thursday that Paramount was looking to buy the entire company, including its movie studio and cable networks.

The Federal Communications Commission approved a merger between Paramount and Skydance in July, after Paramount agreed to pay $16 million to settle a lawsuit Donald Trump filed against its CBS unit in 2024. He had alleged that the network deceitfully edited a 60 Minutes interview with then-Vice President Kamala Harris to make her sound better.

The FCC didn’t immediately respond to a request for comment on the possible Paramount Skydance takeover bid for Warner Bros. Discovery.

Write to Angela Palumbo at angela.palumbo@dowjones.com