The report comes just weeks after the merger between movie giant Paramount and independent film studio Skydance Media.
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Shares in Warner Bros Discovery surged nearly 30% in New York on Thursday after the Wall Street Journal reported that Paramount Skydance was preparing to buy its rival.
Paramount Skydance’s stock also rose around 16% in daily trading.
The majority cash bid is reportedly for the entire company, including its movie studio and cable networks like HBO and CNN. Warner said late last year that it planned to split into two operating divisions: one focused on cable TV and the other on streaming and studios.
Paramount’s offer is allegedly backed by Oracle’s Larry Ellison, who briefly became the world’s richest person this week, overtaking tech tycoon Elon Musk. The billionaire’s son, David Ellison, runs Paramount Skydance.
The WSJ noted that a bid hasn’t yet been submitted and that plans could still fall apart.
Paramount Skydance’s market value was $19 billion (€16bn) as of Thursday’s close, while that of Warner Bros Discovery was roughly $40bn (€34bn).
Paramount and Warner Bros did not immediately respond to requests for comment regarding reports of the acquisition.
If approved, a merger between the two firms would mark the biggest consolidation in Hollywood since Walt Disney bought the entertainment division of Fox Corp. in 2019.
Scale would allow the new company to compete with the likes of streaming giants Netflix and Disney as the industry is redefined by changes in traditional viewing habits.
Paramount Skydance merger
The report comes just weeks after the finalisation of a $8bn (€7bn) merger between movie giant Paramount and independent film studio Skydance Media.
This acquisition became particularly controversial after it was linked to a legal dispute over a CBS News interview.
In July, Paramount paid $16 million (€14mn) to settle a defamation case against US President Donald Trump. The Republican leader claimed that Paramount’s CBS News in November edited a “60 Minutes” news programme with then-vice president Kamala Harris in a way that was deliberately deceptive.
Paramount said in a statement that the settlement with Trump was “completely separate from, and unrelated to, the Skydance transaction and the FCC approval process”.
Even so, critics of the settlement lambasted it as a veiled bribe to appease Trump and allow the merger to go ahead.
Despite the payout, Paramount’s settlement did not include a statement of apology or regret.
Skydance did, however, declare it would end Paramount's diversity programmes and appoint an ombudsman to review complaints of bias. Paramount also cancelled the left-leaning Late Show with Stephen Colbert ahead of the merger approval.
Critics viewed the moves as further attempts to win over President Trump, although Paramount denied that the Colbert show was cancelled for political motives.
