Warner Bros. Is Said to Rebuff Paramount Takeover Approach

(Bloomberg) — Warner Bros. Discovery Inc. rejected an initial takeover approach from Paramount Skydance Corp. as too unlikely, according to people familiar with the matter.

Warner Bros. reportedly rejected Paramount’s offer of approximately $20 per share in recent weeks, the sources said, asking not to be named because the matter is private.

They added that Paramount, led by David Ellison, has several options to acquire Warner Bros., including increasing its bid, going directly to shareholders or finding additional support through a financial partner.

CNBC’s David Faber reported last week that the companies are in talks for a deal but are at odds over price and that Paramount may disclose its offer to shareholders to put pressure on Warner Bros.

Paramount and Warner Bros. representatives declined to comment.

Warner Bros. Its shares closed at $17.10 on Friday, giving the company a market value of $42.3 billion. Paramount shares were valued at $17 per share and valued at $18.6 billion.

Ellison, the son of billionaire Larry Ellison, took over CBS, Nickelodeon, MTV and Paramount, the parent company of its namesake movie studio, in August after completing an $8 billion merger with movie production company Skydance Media.

Paramount was in talks with alternative asset manager Apollo Global Management to back its bid, Bloomberg News reported last week.

Ellison spoke about Warner Bros. at the Bloomberg Screentime conference last week. He said he could not comment on the issue specifically, but that it demonstrated the need for more industry mergers.

Warner Bros. plans to split into two businesses, one focused on cable TV and the other focused on broadcast and studios, in a deal expected to close next year.

Warner Bros., Bloomberg News previously reported. CEO David Zaslav believes he can reap a hefty bonus for broadcast and studio business after leaving the debt-laden cable networks. To reach a deal, Ellison will need to convince him that he isn’t leaving money on the table by selling before that happens.

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