PARA - Wall Street Breakfast Podcast: Warner Bros. Discovery Reportedly In Talks To Merge With Paramount

2023-12-21 06:58:59 ET

Summary

• Warner Bros. Discovery is reportedly in talks with Paramount Global about a potential merger or acquisition.
• Citigroup reportedly plans to exit the distressed debt trading business.
• Panasonic cancels plans to build an EV battery plant in Oklahoma.

Listen below or on the go on Apple Podcasts and Spotify

Warner Bros. Discovery ( WBD ) talking to Paramount ( PARA ) about possible deal - reports. (00:26) Citigroup ( C ) plans to exit distressed debt trading - report. (01:54) Tesla ( TSLA ) supplier Panasonic (P C RFY) shelves plan to build EV battery plant in Oklahoma. (02:17)

This is an abridged transcript of the podcast.

Warner Bros. Discovery (NASDAQ: WBD ) has held talks with Paramount Global (NASDAQ: PARA ) to discuss a potential merger with the owner of Paramount movie studio as well as CBS and other TV properties.

according to an Axios report on Wednesday, which cited multiple unidentified sources, Warner Bros. ( WBD ) CEO David Zaslav met with Paramount ( PARA ) CEO Bob Bakish on Tuesday in New York City to discuss a deal. The CEOs met for several hours at Paramount's headquarters in Times Square.

According to Axios, Zaslav has also spoken to Shari Redstone about a transaction. Redstone owns Paramount's parent company National Amusements.

Bloomberg on Wednesday confirmed that Warner Bros. Discovery ( WBD ) held talks with Paramount ( PARA ) about a potential combination. The talks are described as preliminary.

The WSJ also confirmed the discussions, but said no formal talks between the companies are under way.

It's not clear if WBD would buy Paramount Global ( PARA ) or its parent company, National Amusements, though both options are possibilities, Axios said.

Talks between the companies are in early stages and may not lead to a deal, according to the report. Warner Bros., which also owns HBO and CNN, has a market cap of $30 billion, while Paramount is valued at $10.5 billion.

News of a potential Paramount ( PARA ) sale also comes after Paramount in November implemented a change to severance for key executives in the event of a change in control of the company.

Paramount ( PARA ) short interest is 16%.

Wednesday WBD closed -5.7% and Paramount fell 2%.

Citigroup (NYSE: C ) has decided to quit the distressed-debt trading business as part of the company's broader strategy to increase its efficiency and, with it, profits, according to a media report.

The move to leave the business, which is run by Joseph Beggans and Pat Kris, removes a key player in distressed debt markets, Bloomberg News reported , citing people briefed on the decision.

A Citi ( C ) spokesperson declined to comment to Seeking Alpha about the report.

Premarket Citi (C ) is up 0.7%.

Last week, Bloomberg reported that Citi ( C ) is shutting its municipal bond trading and underwriting business.

Panasonic is no longer planning an EV battery plant in Oklahoma.

Panasonic Energy, a Tesla supplier, is currently building an EV battery facility in Kansas. However, it has been facing higher-than-expected costs at the site, which may have discouraged it from building another similar facility.

Panasonic ( OTCPK:PCRFY ) had been considering building its third U.S. battery plant in Oklahoma since April.

The company also operates a plant in Nevada alongside Tesla.

Wednesday we highlighted General Mills ( GIS ) as one of the companies in our earnings spotlight.

General Mills ( GIS ) had a mixed FQ2 earnings report and a cut in its full-year guidance .

Net sales were down 2% during the quarter to $5.1B. EPS came in at $1.25 vs. $1.16 consensus and $1.10 a year ago. The EPS improvement was primarily due to higher adjusted operating profit and lower net shares outstanding, partially offset by higher net interest expense.

Looking ahead, General Mills ( GIS ) sees full-year organic sales growth of -1% to 0% vs. a prior view for +3% to +4%. Full-year EPS growth of +4% to +5% is anticipated vs. the prior view for +4% to +6%.

In our earnings spotlight for today, CarMax ( KMX ), Paychex ( PAYX ), Carnival ( CCL ), and Nike ( NKE ).

On our catalyst watch for the day,

• ARK Invest will hold its December Fund mARKet Update webinar.

Other articles to look out for on Seeking Alpha:

Accenture to buy Jixie, a digital marketing platform in Indonesia

Microsoft, OpenAI see authors join copyright lawsuit over AI models' training - report

Alphabet gains amid report of restructuring to impact ad sales unit

Wall Street's rally suffered a setback on Wednesday, with U.S. stocks ending lower following a sharp downward move in late afternoon trade. Meanwhile, Treasury yields added to their decline as bond buying intensified.

The Nasdaq ( COMP.IND ) fell 1.50%, while the Dow ( DJI ) slipped 1.27%.

The S&P ( SP500 ) lost 1.47%, posting its worst intraday performance since late-September.

All 11 S&P sectors ended in the red.

Treasury yields added to their decline as traders stepped up buying of bonds. The 10-year yield ( US10Y ) was down 7 basis points to 3.85%. The 2-year yield ( US2Y ) was down 9 basis points to 4.35%.

U.S. existing home sales accelerated to 3.820M in November compared to a consensus estimate of 3.77M. The rise marked the end of a five-month skid as easing mortgage rates have made buying of homes slightly more affordable. Notably, numbers from the Mortgage Bankers Association earlier in the day showed that the 30-year fixed mortgage rate reached its lowest level since June.

Additionally, the Conference Board's gauge of consumer confidence rose to 110.7 in December, jumping past estimates of 103.4.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up 0.5%, the S & P 500 is up 0.5% and the Nasdaq is up 0.7%. Crude oil is down 0.3% at more than $74 per barrel. Bitcoin is up 2.9% and above $44,000.

In the world markets, the FTSE 100 is down 0.4% and the DAX is down 0.5%.

The biggest movers for the day premarket: BlackBerry (NYSE: BB ) is down 4.8% after the company reported mixed Q3 results and missed estimates for its outlook.

On today’s economic calendar:

• 830 am GDP

• 10 am leading indicators

For further details see: