Warner Bros Discovery considering break up to boost stock price, FT reports
1:18 am Thursday, July 18th, 2024
(Reuters) -Warner Bros Discovery, the owner of CNN and HBO, has discussed a plan to split its digital streaming and studio businesses from its legacy TV networks as it looks to boost its flailing stock price, the Financial Times reported on Thursday.
CEO David Zaslav is examining several strategic options for the company, ranging from selling assets to separating its Warner Bros movie studio and Max streaming service into a new company, the FT reported, citing people familiar with the matter.
The report said most of the group’s debt — about $39 billion as of March 31, according to a company filing — could remain with the pay-TV networks business if Warner Bros breaks up.
Warner Bros’ shares have fallen nearly 27% this year through Wednesday’s close, valuing the company at $20.39 billion, according to LSEG data.
The group is yet to hire an investment bank to initiate any specific transaction, the report said. The company did not immediately respond to a Reuters request for comment.
In May, Warner Bros reported a bigger-than-expected quarterly loss due to slumping advertising sales at its cable TV unit and as the studio segment contended with the fallout of last year’s Hollywood strikes.
The group’s streaming unit fared better, adding 2 million subscribers that helped its adjusted core profit jump 72%.
Bank of America research analysts have previously said Warner Bros spinning off its direct-to-customer and studio assets as a standalone company could hurt its debt but boost its equity value.
(Reporting by Shivani Tanna and Nilutpal Timsina in Bengaluru; Editing by Mrigank Dhaniwala, Nivedita Bhattacharjee and Savio D’Souza)
