Netflix is weighing a bid for Warner Bros Discovery’s studio and streaming assets, marking what could be one of the entertainment industry’s most significant consolidation moves in recent years.
The streaming giant has hired investment bank Moelis & Co to advise on a possible offer and has been granted access to Warner Bros Discovery’s financial data room, Reuters reported, citing sources.
Moelis & Co, the investment bank, also advised Skydance Media on its successful bid for Paramount Global.
Shares of both companies surged more than 3% in after-hours trading following the news.
The development comes as Warner Bros Discovery evaluates strategic options, including a potential split between its entertainment and television divisions or an outright sale of its business.
Netflix eyes Hollywood crown jewels
A deal with Warner Bros Discovery would give Netflix ownership of some of Hollywood’s most valuable intellectual property, including the Harry Potter and DC Comics franchises.
It would also bring under its control the Warner Bros television studio, which produces several Netflix hits such as “You,” “Running Point,” and “Maid.”
The addition of HBO and its companion streaming service Max would further strengthen Netflix’s lineup with prestige dramas and a broader subscriber base.
However, sources told Reuters that Netflix’s interest is limited to the studio and streaming assets, excluding legacy cable networks like CNN, TNT, and Food Network.
CEO Ted Sarandos reiterated during the company’s latest earnings call that Netflix had “no interest in owning traditional media networks.”
Warner Bros Discovery weighs its future
Warner Bros Discovery announced last week that its board is assessing a range of unsolicited offers, including one from Skydance Media, which recently acquired Paramount Global.
The company is simultaneously considering a long-discussed plan to split its entertainment and television units.
The split would separate the Warner Bros film and TV studios, HBO, and Max from its broadcast and cable network operations, which have faced pressure amid declining linear television audiences.
Comcast President Mike Cavanagh also hinted that his company could be eyeing complementary media assets, telling investors that “more things are viable than maybe some of the public commentary suggests.”
Netflix announces stock split amid strong share rally
Separately, Netflix unveiled a 10-for-1 forward stock split on Thursday, aiming to make its shares more affordable to retail investors.
Under the plan, shareholders will receive nine additional shares for each share held after the market close on November 10.
Trading on a split-adjusted basis will begin on November 17.
Netflix’s stock has surged more than 360% over the past three years and currently trades above $1,100, making it one of only 10 S&P 500 companies with a four-digit share price.
The move marks Netflix’s third stock split, following earlier ones in 2004 and 2015.
While a split doesn’t affect the company’s overall valuation, it typically boosts liquidity and broadens investor participation.
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