The entertainment industry faces a big shakeup with Netflix reportedly exploring a potential takeover bid for Warner Bros. Discovery’s studios and streaming operations.
Video streaming giant Netflix has hired investment bank Moelis & Co to evaluate a prospective offer for this part of the global media and entertainment company, according to Reuters.
“Sources say Netflix has been granted access to Warner Bros. Discovery’s financial data room, suggesting discussions have reached an advanced exploratory phase,” Reuters reported in this exclusive article.
Moelis & Co also advised Skydance Media on its recent takeover of Paramount Global.
Warner Bros. Discovery recently disclosed it was assessing an unspecified number of unsolicited takeover proposals, including three that it rejected as too low from Paramount Skydance.
It is also weighing up whether to split itself into separate film, television and streaming units from its legacy cable networks such as CNN, TNT, and Food Network.
Warner Bros' studio business includes iconic Hollywood franchises such as Harry Potter and DC Comics, and produces many of Netflix's hits, including Running Point, You and Maid.
CEO Ted Sarandos said last week Netflix considered acquisitions based on criteria such as size of the opportunity and value to its entertainment offerings, but it would not be interested in acquiring Warner Bros Discovery's cable television networks.
"We've been very clear in the past that we have no interest in owning legacy media networks," Sarandos said.
"There is no change there."
Netflix shares (NASDAQ: NFLX) closed $29.86 (2.74%) higher at $1,118.86 on Friday (Saturday AEDT), capitalising the company at $474.10 billion, while Warner Bros Discovery (NASDAQ: WBD) shares ended up 83 cents (3.84%) at $22.45, giving it a market value of $55.58 billion.
