Warner Bros Discovery Inc (NASDAQ:WBD, ETR:J5A) is considering a plan to spin off its digital streaming and movie studio businesses from its TV networks to lift its share price, according to a Financial Times report on Thursday.
Investors welcomed news of the break-up plan, which Bank of American Global Research analysts said could yield greater shareholder value, sending shares of Warner Bros Discovery up 5.2% at US$8.76 in the early afternoon.
People familiar with the matter told the publication that CEO David Zaslav is weighing several strategic options, including selling assets to splitting off its Warner Bros movie studio and Max streaming service into a new company which would not be burdened by the group's $39 billion debt load.
The company’s shares have fallen 65% since a 2022 merger which created the company, bringing its market capitalization to about $20.4 billion.
An investment bank has not yet been hired to initiate a specific transaction but management has been talking to advisors to “find a solution in shareholders’ best interests,” the people told the publication.
One person added that advisors of rival media groups have been approached to gauge their interest in mergers and acquisitions with some of its assets.
The company could ultimately decide to continue to operate under its current structure, the people said.