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Warner Bros Discovery Inc (NASDAQ:WBD) shares are trading higher on Friday after the company initiated a strategic review to maximize shareholder value, with The Wall Street Journal reporting that Paramount Skydance Corp (NASDAQ:PSKY), Comcast Corp (NASDAQ:CMCSA) and Netflix Inc (NASDAQ:NFLX) are preparing bids.
What Happened: The strategic review was initiated by Warner Bros’ board of directors following the interest of multiple parties’ unsolicited interest, according to the Wall Street Journal. The company is considering a wide range of options, such as a deal for the entire business and separate agreements for its Global Networks business, which includes cable holdings like CNN, TNT and Discovery Channel, or its Streaming & Studios business.
The initial deadline for nonbinding first-round bids is reportedly Nov. 20, with the company hoping to complete the auction process by year-end.
The Ellison family, which includes Oracle Corp (NYSE:ORCL) co-founder Larry Ellison, and private equity firm RedBird Capital Partners support Paramount’s bid.
Warner Bros is moving forward with its plans to divide its assets into two businesses: one that will house its studios and streaming services, and the other that will include cable networks. The business recently made it clear that change-in-control clauses in CEO David Zaslav‘s employment contract won’t apply to some internal restructuring transactions necessary for strategic alternatives.
Wells Fargo recent analyst rating for WBD reaffirmed an Equal-Weight status, increasing the target from $21.00 to $25.00 on Nov. 7, following multiple upgrades for the company. On Oct. 30, Rothschild & Co moved WBD from Neutral to Buy and set a $28.00 target price. Argus Research also upgraded the company to Buy from Hold on Oct. 28, setting a target of $27.00.
Further positive actions were seen from Barrington Research and Benchmark in October. Barrington maintained an Outperform rating for WBD and upped the target from $16.00 to $25.00 on Oct. 28. Similarly, Benchmark maintained a Buy rating and increased the target from $18.00 to $25.00 on Oct. 22.
WBD Price Action: Warner Bros Discovery shares were up 3.79% at $22.98 at the time of publication on Friday. The stock is trading near its 52-week high of $23.19, according to Benzinga Pro.
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