Source: CNN
Paramount and Netflix are in a vicious tug-of-war over Warner Bros. Discovery.
On one side of the rope: the suitor WBD’s board signed off on, Netflix, which announced a $72 billion deal last week. On the other side, the suitor the board turned down, Paramount, which is resorting to a tactic known as a hostile takeover.
A hostile takeover occurs when a company attempts to acquire another by going around the takeover target’s management and making an appeal directly to shareholders.
While friendly, mutually agreed upon acquisitions between two companies tend to have a higher success rate, hostile takeover bids, though riskier and often costly, can prove successful, too.
If Paramount’s $30-per-share, all-cash bid worth $108 billion (including debt) for complete ownership of WBD succeeds, it’ll be the fourth-largest hostile takeover to be completed over the past 20 years, according to data Dealogic shared with CNN. And oftentimes the initial hostile takeover bid a company announces goes even higher.
As it stands, though, here are the top five largest hostile takeover bids that have succeeded. All figures exclude debt:
In 1999, UK-based telecom company Vodafone Airtouch (now Vodafone Group) first presented the board of German telecom company Mannesmann with an all-stock acquisition, which Mannesmann’s board rejected.
Vodafone proceeded with a hostile takeover bid to buy Mannesmann shares that was finalized in 2000 and valued at $171 billion.
Anheuser-Busch, the victim of a successful hostile takeover bid by InBev, formed a company that later became known as Anheuser-Busch InBev. That company then launched a hostile takeover bid for SABMiller in 2015 after it failed repeatedly at friendly takeover attempts. The negotiated deal settled at $122 billion in 2016.
Pfizer succeeded with its hostile takeover bid of Warner-Lambert, a pharmaceutical company known for making the cholesterol-lowering drug Lipitor, in 2000. The all-stock deal closed at $110 billion that year.
Royal Bank of Scotland, seeking to prevent a friendly takeover of Dutch bank ABN Amro by Barclays, got two other banks to collectively make a hostile bid that would divide ABM among all three. It was eventually finalized in 2007 in a deal valued at $96 billion. The deal, however, helped contribute to RBS’ demise.
Sanofi-Synthelabo’s surprise hostile takeover bid of Aventis, a Franco-German pharmaceutical company, was valued at $73 billion in 2004.