FT Sources Report WBD To Focus On Asset Sales As Opposed To Break-Up

Baa3/BBB-BBB-

• WBD bonds widened significantly on the reports of a break-up strategy so it stands to reason that they would tighten on this report to the contrary.
  
  
• FT sources reports that WBD is aiming to prevent a break-up by selling smaller assets, e.g., Polish broadcaster TVN or a stake in its video games business.
• CEO David Zaslav and CFO Gunnar Wiedenfels have reportedly recently evaluated “all options”
• Senior executives have determined that a corporate split would likely lead to operational issues and legal challenges around sports rights deals, the role of linear TV and its priority vs. streaming, a potential lawsuit from debtholders etc.
• Management prefers asset sales to streamline and reduce debt e.g. Polish broadcaster TVN or a stake in its video games business. Management has been keen to sell CNN though sources note that the bar for divesting would be “very, very high” due to strategic/tax implications and WBD reportedly consider it unlikely they would receive an offer compelling enough.
• Shares have dropped nearly 70% since the 2022 merger; the article states that management targets a market cap of $60bn ($25/share) vs. current $7.88/share.