Andrew Bary
Versant Media Group, the cable networks spinoff from Comcast, debuted Monday in when-issued trading at a price that values the company's equity at about $6.5 billion.
It's not easy to draw a firm conclusion about the ultimate trading level for Versant because trading activity is extremely light at under 5,000 shares and the stock has traded in a wide range between $42 and $59. The last sale was at $45 a share.
When-issued trading in a spinoff occurs before the final separation, which in the case of Versant will occur after the close of trading on Jan. 2, 2o26, with regular trading due to start on Monday, Jan. 5. When-issued trading often is light because most investors wait until regular trading begins to transact in a stock.
Versant, which holds such Comcast cable properties as CNBC, MS NOW (formerly MSNBC) and the Golf Channel, was expected to carry a low valuation because cord cutting and advertising challenges in cable are resulting in lower revenues and profits.
At $45, Versant would be valued at about 4.5 times projected 2026 earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $1.925 billion, based on a forecast the company shared at its recent investor day. There will be about 144 million shares outstanding, and the company is expected to carry about $2.25 billion of net debt. Our calculation of a valuation of 4.5 times reflects Versant's enterprise value (equity value plus net debt). Ebitda is a key valuation metric for media and cable companies.
Barron's wrote recently that Versant could be valued at six times projected 2025 ebitda or closer to $70 a share. That looks high based on the current share price.
The Versant spinoff valuation could figure in the current takeover battle between Paramount Skydance and Netflix for Warner Bros. Discovery. The deal that Netflix struck with Warner Bros. would leave the company's cable network business outstanding and be spun off to Warner Bros. shareholders.
That Discovery Global business, including CNN and TBS, is similar to Versant's portfolio, and the Versant valuation will give a read on how Discovery could trade.
Paramount has offered $30 a share in cash for the whole company while Netflix has reached a deal for $27.75 for Warner's streaming business, HBO, and movie studio among other assets, with the cable networks to be spun off. The superiority of the Netflix deal hinges in part on the cable valuation, which Barron's has estimated around $4 a share.
The higher the valuation of Versant, the better for Netflix since that would imply a higher valuation on the larger Discovery Global.
Paramount argues its bid is all cash and doesn't involve uncertainty about the Discovery cable company which will have sizable debt and faces some of the same pressures as Versant.
Versant is what Wall Street calls a "melting ice cube" with declining revenues and cash flow. The company projects that next year's revenues could drop around 5% (based on the middle of a range) to about $6.3 billion, while ebitda could decline about 10% to $1.925 billion (middle of a range).
The bull case for Versant is that it generates significant free cash flow -- a projected $1.1 billion next year -- and has a good balance sheet and could become a takeover target. The company has been seeking to diversify away from traditional cable revenues.
Comcast holders will get one share of Versant for every 25 shares of Comcast.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 15, 2025 15:57 ET (20:57 GMT)
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