Warner Bros. says: Discovery It’s open for sale; Stocks jump 9%

Warner Bros. Discovery It said Tuesday it is expanding its strategic review of the business and is open to a sale, sending the company’s shares up 9% in pre-market trading.

Earlier this year, WBD announced plans to split into two separate entities, its broadcast and studio businesses and its global networks business. There has also been interest in exiting from the newly combined companies Paramount Skydance.

But on Tuesday, WBD said it had received “unsolicited interest” from multiple parties and would now review all options. The company said it is still moving toward the previously announced separation in the meantime.

“We continue to take important steps to position our business for success in today’s evolving media landscape by advancing our strategic initiatives, returning our studios to industry leadership, and expanding HBO Max globally,” CEO David Zaslav said in a statement. “We have taken the bold step of preparing to separate the company into two distinct, leading media companies, Warner Bros. and Discovery Global, because we strongly believe this is the best path forward.”

“It is not surprising that the significant value of our investment portfolio has been increasingly recognized by others in the market. After receiving interest from multiple parties, we have initiated a comprehensive review of strategic alternatives to determine the best path forward to unlock the full value of our assets,” he said.

Netflix and Comcast They are among the interested parties, sources told CNBC’s David Faber.

WBD decided to go public that it had interest from multiple parties after rejecting several different offers from Paramount and an offer from another company that was higher than Paramount’s, according to a person familiar with the matter.

It’s unclear how serious the potential offers outside of Paramount are. A source familiar with the matter said Netflix was not interested in buying the legacy media assets, but did not want WBD to go to another buyer at a low price.

While Comcast feels the need to make a deal, it will consider the possibility of pursuing WBD, sources close to the company told CNBC’s Julia Boorstin. However, this does not mean that Comcast will seek an agreement.

For any buyer who just wants WBD’s studio and streaming assets, acquiring them after the split later this year is better for tax purposes.

Spokespeople for Paramount and WBD declined to comment. Netflix and Comcast did not immediately respond to requests for comment.

WBD has faced increasing financial challenges since the merger of WarnerMedia and Discovery Inc. in 2022, burdening the company with more than $40 billion in debt. Since then, it has significantly cut costs, restructured its content line and focused on profitable franchises like “Harry Potter” and “Game of Thrones.”

Although the company has made progress in reducing debt, investors remain skeptical in part because of the company’s portfolio of cable networks as consumers move toward streaming.