The news: Warner Bros. Discovery (WBD) reportedly rejected a proposed acquisition from Paramount Skydance, claiming that its offer of $20 per share was “too low,” per Bloomberg reporting. WBD stock was trading at $18 per share Monday morning—indicating that Paramount Skydance’s offer may have lacked a premium that would convince WBD to merge.

Zooming out: The rejection comes a month after it was first reported that Paramount Skydance was preparing a bid to acquire WBD in a majority-cash takeover. The offer would have included WBD’s entire slate of linear and digital video assets, preempting WBD’s planned 2026 split.

• As the film and TV industry broadly looks to consolidate, WBD still controls key ad-supported assets like HBO Max and CNN, while its mix of scripted prestige content, news, and sports rights gives advertisers access to diverse audience segments—which, for Paramount, would mean more scale in key formats.
• Paramount and Skydance’s merger was partly a bid to gain scale and diversify revenues across theatrical, streaming, and linear—and acquiring WBD would help it better rival giants like Disney and Comcast.

Why WBD isn’t all-in: Paramount Skydance’s offer of $20 per share is low for a mega-merger—the premium for Paramount shareholders during Paramount and Skydance’s merger was 48% higher than Paramount’s stock price at the time, per Deadline.

The companies are similarly sized—WBD’s September market value of $18.07 billion was nearly on par with Paramount Skydance’s $18.12 billion. With WBD’s yearslong plan to split into two separate companies—one focused on streaming and studios, the other on global cable networks—to capitalize on the shift to digital video and reduce debt, it lacks incentive to merge without a bigger payoff.

Our take: WBD’s rejection signals that some legacy media players see more value in restructuring themselves than in merging on the cheap. The company’s planned asset spinoffs will ideally help WBD remain on-track to reduce its debt and make WBD less likely to agree to a Paramount Skydance acquisition at a price they view as undervaluing future growth potential.

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