Paramount Preparing Offer to Buy Warner Bros, Including CNN

Paramount Skydance is working with an investment bank as it prepares an offer for Warner Bros. Discovery, according to people familiar with the matter.

Warner Bros. Discovery had yet to receive an offer as of Thursday, according to people familiar with the matter, who spoke on the condition of anonymity to discuss nonpublic dealings.

Shares of Warner Bros. Discovery soared more than 25% on Thursday after an initial report from the the Wall Street Journal that the recently merged Paramount Skydance was preparing a takeover bid.

Shares of Paramount Skydance were up roughly 8% in afternoon trading.

Warner Bros. Discovery recently announced plans to separate its global TV networks business from its streaming business and studios.

The Journal reported Thursday the Paramount Skydance bid would be an all-cash offer for the entirety of WBD.

Earlier this week, WBD CEO David Zaslav said at an investor conference that the planned separation would likely be completed by April. The streaming and studio assets would be renamed Warner Bros., while the global TV networks business — which will own a suite of pay TV networks including TNT and CNN — will be Discovery Global.

Paramount and Skydance completed their merger in August after a lengthy delay. Since then, the company has done a slew of deals under the leadership of David Ellison, son of billionaire Larry Ellison.

The media industry overall has been navigating a moment of transformation as streaming has upended the pay TV bundle, a longtime cash cow for TV and entertainment companies.

WBD and cable giant Comcast, both announced the separation of their pay TV businesses into independent entities, and many have expected consolidation to be the path forward for the industry.