Shares in Warner Bros. Discovery surged by almost a third in the wake of a report it is in the sights of its smaller rival Paramount Skydance Corp.
The planned cash takeover bid reported by the Wall Street Journal (WSJ) newspaper would be backed by the wealthy Ellison family and if consummated create a media giant with a combined market value of US$60 billion (A$91 billion).
The Warner Bros share priced closed $3.63 or 28.95% higher at $16.17 on Thursday (Friday AEST), capitalising the media and entertainment company at $40.03 billion, after earlier hitting a four year high of $17.24.
In an article quoting ‘people familiar with the situation’, the WSJ wrote the so-far unsubmitted Paramount Skydance bid would be for all of Warner Bros, including its cable networks and movie studio.
If successful the deal would combine two of Hollywood’s best-known film studios and intensify competition with industry giants Netflix, Disney and Amazon.
The move comes less than a month after Skydance Media, led by David Ellison, the son of Oracle co-founder and billionaire Larry Ellison, finalised an $8.4 billion takeover of Paramount Global.
"This deal is the Hollywood equivalent of a sequel no one expected but everyone sort of saw coming," eMarketer analyst Jeremy Goldman was quoted in a Reuters story as saying.
Since then, Ellison has started to boldly expand by signing exclusive content and sports rights deals such as the US$7.7 billion (A$11.8 billion) purchase of United States broadcast rights to the Ultimate Fighting Championship (UFC) for seven years.
Warner last year announced it planned to create two operating divisions with one based on its cable-television business and the other on streaming and studios.
Shares in Paramount Skydance (NASDAQ: PSKY) closed $2.35 (15.55%) higher at $17.46 on Thursday (Friday AEST), which capitalises the company at $7.68 billion, after earlier hitting a record high of $17.58.
Paramount Skydance owns entertainment brands including Paramount Pictures, CBS, MTV, Comedy Central, Nickelodeon and Paramount+.
Larry Ellison, 81, the world’s second-richest person behind Elon Musk, has a net worth of more than $360 billion.
