JPMorgan and Allen & Company stand to earn at least $180 million as advisers in the Warner Bros bidding war.
Netflix has raised its bid, intensifying competition with Paramount Skydance for the studio.
Warner Bros is spending heavily on restructuring and advisory fees ahead of a potential sale.
As Netflix Sweetens Offer, JPMorgan and Allen Eye Massive Warner Bros Paydays
The contest for Warner Bros intensified this week after Netflix raised its bid to $83 billion for the company’s studio and streaming businesses. Attention is now shifting to Paramount, whose $108 billion tender offer for Warner Bros is due to close soon
As Netflix Sweetens Offer, JPMorgan and Allen Eye Massive Warner Bros Paydays X
Summary
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While Netflix and Paramount Skydance battle to acquire the Hollywood studio Warner Bros Discovery, the biggest winners may turn out to be the investment banks advising the deal.
JPMorgan Chase and Allen & Company are each set to earn around $90 million in advisory fees, regardless of which bidder ultimately acquires the Hollywood studio, Reuters reported citing a securities filing. Additionally, JPMorgan is expected to make significantly more due to its role in financing a complex restructuring ahead of the sale.
The contest for Warner Bros intensified this week after Netflix raised its bid to $83 billion for the company’s studio and streaming businesses. Attention is now shifting to Paramount, whose $108 billion tender offer for Warner Bros is due to close soon.
The Hollywood studio is in the middle of splitting its operations—separating its cable news and sports assets, including CNN, from its movie and television business—in preparation for a sale. The company has spent hundreds of millions of dollars in fees to complete this process.
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JPMorgan has already earned $189 million in financing and related fees for arranging a $17.5 billion bridge loan that enabled the split. The loan is estimated to be the largest non-investment-grade bridge loan ever issued on Wall Street, the report added.
Including advisory fees, JPMorgan stands to make a total of about $282 million from Warner Bros. This includes payments for fairness opinions on Netflix’s original bid in December and its revised offer this week, as well as additional merger and acquisition fees once a deal is completed.
Allen & Company is also expected to earn at least $90 million. The bank has already received part of its compensation and is due to collect further advisory fees when the transaction closes. Warner Bros had reportedly said one of its board members, Paul Gould, who is also MD at Allen & Company, is not involved in the transaction advisory work and will not personally receive any related fees.
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