On 28 August, just eight weeks ago, I estimated the fair value of Warner Bros. Discovery (WBD 0.00%↑) to be just under $25 per share in a widely read article. This calculation was based on a sum-of-the-parts analysis, with the WBD share price at the time being less than $12.
Anyone who knows me knows that I am very cautious when it comes to setting price targets. I usually avoid specifying a specific price target or timeframe for a stock revaluation because my crystal ball doesn’t work.
In this case, however, the investment case was clear in terms of the time horizon. The announced split of the WBD conglomerate into Warner Bros. and Discovery Global by mid-2026 was a clear catalyst for a revaluation.
It seems I was way too conservative with my timeline for the overdue revaluation of the WBD stock. In the two months since I published these lines, the price has already exploded by 75%.
What happened, and what will happen next?
WBD as an Object of Desire
Just two weeks after my article was published on September 11th, 2025, reliable rumors about an imminent takeover bid by Paramount Skydance for Warner Bros. Discovery emerged. The share price jumped by around 50% in just one trading session.
The Paramount offer is backed by Larry Ellison, currently the second richest person on the planet, with an estimated fortune of just under $400 billion. With his support, the much smaller Paramount Skydance could take over the entire Warner Bros. Discovery group before its planned split.
But only if the price is right and the WBD board agrees to such a deal.
This is where things get exciting. On October 21st, the WBD board rejected an offer from Skydance Paramount for the third time in a matter of weeks. The initial offer in September was reportedly $19 per share and then $22 before it was revised to approximately $24 per share. This corresponds to an equity value of $60 billion, or $95 billion in enterprise value, including the WBD debt to be acquired. At least, that’s what the usually well-informed Wall Street Journal reports.
I’m excited and a little proud that this offer corresponds almost exactly to the fair value I calculated for WBD in my last post.
Neither Skydance Paramount nor WBD has officially confirmed these offers. Instead, on October 21st, WBD issued a press release confirming that it had received offers from several interested parties for a partial or complete takeover of the group. WBD is now reviewing different strategic options with the aim of maximizing shareholder value.
Anything is possible, including selling the entire group, selling the future Warner Bros., or merging with a spin-off of Discovery Global. At the same time, the company made it clear that it will stick to its plan to split the WBD group into two independent companies, at least for the time being.
Will there now be a Bidding War?
In recent weeks, WBD CEO David Zaslav has hinted that he is dissatisfied with the price offered by Paramount Skydance as well as the current WBD share price.
He believes that Warner Bros. alone (after the split) deserves a valuation comparable to Netflix’s after the split and is allegedly worth $30 per share, a view that has been supported by some bullish analyst statements.
Zaslav is known as a very good “dealmaker,” and drumming up interest is part of his job. In this context, I also see WBD’s latest press release as a call for other interested parties to enter a bidding war.
Indeed, in consideration of the upcoming split, there are several potential bidders likely interested in at least one of the two parts of the WBD group.
Netflix is often mentioned as a potential buyer of the studio/streaming assets (i.e., the future Warner Bros.). Such an “asset deal” could strengthen the streaming giant’s leading position and cement its status as the undisputed market leader. One argument against a mega-deal with Netflix is that the company is known for its caution in mergers and acquisitions and does not necessarily need such a deal to be successful. Even after the statements made during the Netflix analyst call on 21 October (in which they did not rule out an offer), I consider the likelihood of a Netflix offer at a strategic price to be quite low.
Besides Paramount Skydance, Comcast and its media subsidiary, NBCUniversal, would probably be the only other potential buyer of the entire WBD group. However, a merger would be difficult from a regulatory standpoint and would likely be considered “too big to approve.” Not to mention the political dimension: Donald Trump would certainly prefer that WBD be controlled by his friend, Larry Ellison, or taken over by Paramount Skydance - to put it mildly.
Several reports name Apple and Amazon as potential bidders for the future Warner Bros. after the split.
In 2022, Amazon took its first serious step into the media industry with the acquisition of MGM Studios, proving its willingness to pay high prices for strategic acquisitions.
Apple is not known for large acquisitions, but in this case it may be interested in upgrading its media division by acquiring one of the most valuable IP libraries in the world.
Such mega-acquisitions by Big Tech seemed unthinkable under the Biden administration but appear to be possible again under Donald Trump.
Sony is also mentioned repeatedly as a content consolidator and could be interested in Warner Bros., but such a deal would likely require financially strong partners.
So, how should WBD shareholders act now?
Yes, I really think there could be a bidding war for WBD in the coming weeks and months, driving the takeover price toward $30. That would be 40% more than today’s price.
But as many of you know, the stock market tends to exaggerate. In the case of WBD, we’ve seen years of exaggerated decline. It’s hard to believe that WBD shares were available for $7 just 12 months ago. I have pointed out this bargain several times in my coverage. However, I would consider a strategic takeover price significantly above $25 to be an exaggerated increase price at this point.
Of course, one could speculate that the price will reach $30 at the end of a takeover battle. I don’t consider that unlikely. Nevertheless, I am acting differently now. After more than 3 years, I am happy that my investment case has finally paid off, and I would actually sell now with a nice three-digit profit as soon as the fair price I calculated of $24-$25 per WBD share is paid.
In my opinion, there is a significant risk that no deal will be reached in the end because David Zaslav has a strong ego and I think he wants to stay in power. I don’t think he’s happy with a co-CEO role, which the Ellisons have reportedly offered him after a merger with Paramount. A failure of the takeover negotiations would send WBD shares plummeting as short-term speculators looking for quick profits would then abandon the stock.
Even now, I am going to reduce my heavily weighted WBD position somewhat at prices above $20. However, this is more for tactical reasons. I want to increase my cash position in anticipation of a downturn in the stock market (keeping my powder dry), and I now see significantly greater price potential in other stocks in my portfolio (e.g., Lyft, IAC and Angi).
You can read about these investment cases here:
*Disclaimer: The author and/or related persons or entities own shares of Warner Bros. Discovery, IAC, Angi and Lyft This stock analysis is an expression of opinion and not investment advice.