Netflix is reported to be exploring a bid for the Warner Bros Discovery studio and online video business. It has hired an investment bank to evaluate a possible offer and has been given access to the data room with the financial details of the company.
Netflix has hired Moelis & Co, the investment bank that advised Skydance Media on its successful bid for Paramount Global, to consider a prospective offer, according to Reuters reports. The companies involved have declined to comment.
Warner Bros Discovery is evaluating its own options, after receiving multiple offers from Paramount Skydance to acquire the entire company. The WBD board is currently considering whether to proceed with a planned split to separate its studio and television businesses or to pursue a sale of all or parts of the company.
Netflix has not looked to acquire potential competitors previously but could be considering the threat of the alternatives. The combination of Paramount Skydance and Warner Bros could provide real competition. On the other hand, if Netflix were to make a successful bid, it could strengthen its hand with a strong catalogue including the Superman, Batman, Harry Potter, and Barbie franchises, among many more.
Ted Sarandos, the joint chief executive of Netflix, told analysis in its recent earnings call that the company as “no interest in owning legacy media networks”, saying it can be choosy and is “predominantly focused on growing organically”.
Greg Peters, the other joint chief executive, said “We’ve also seen a lot of industry consolidation over the years” and “we have also seen a wide range of outcomes from such mergers”.
“Watching some of our competitors potentially to grow bigger via M&A does not change in and of itself, at least our view of the competitive landscape”. However, it said “it’s our responsibility to look at every significant opportunity” and “we’ll do whatever we thing is best to grow the business”.