Paramount launches a hostile $108 billion bid to snatch Warner from Netflix
Paramount is making an all-cash offer, telling Warner shareholders it can beat Netflix’s ‘inferior’ $83 billion offer.
Paramount is making an all-cash offer, telling Warner shareholders it can beat Netflix’s ‘inferior’ $83 billion offer.
by
is a news writer who covers the streaming wars, consumer tech, crypto, social media, and much more. Previously, she was a writer and editor at MUO.Paramount has launched a $108.4 billion hostile takeover bid for Warner Bros. Discovery, calling Netflix’s $83 billion arrangement to purchase the entertainment giant’s studios and streaming service “inferior.” The Paramount proposal, unlike Netflix’s, would also include the linear networks owned by WBD.
Paramount says its deal offers a “superior alternative to the Netflix transaction,” citing the potential for a long regulatory approval process “with an uncertain outcome.” In an interview with CNBC’s David Faber, Paramount Chairman and CEO David Ellison dodged a question about whether his father, Larry Ellison, would sell shares to fund the offer. Regulatory filings spotted by Axios indicate that Affinity Partners, the private equity firm founded by President Donald Trump’s son-in-law, Jared Kushner, is also part of Paramount’s bid.
Paramount, a Skydance Corporation (NASDAQ: PSKY) (“Paramount”), today announced it has commenced an all-cash tender offer to acquire all of the outstanding shares of Warner Bros. Discovery, Inc. (NASDAQ: WBD) (“WBD”) for $30.00 per share in cash. Paramount’s proposed transaction is for the entirety of WBD, including the Global Networks segment.
Paramount’s strategically and financially compelling offer to WBD shareholders provides a superior alternative to the Netflix (NASDAQ: NFLX) transaction, which offers inferior and uncertain value and exposes WBD shareholders to a protracted multi-jurisdictional regulatory clearance process with an uncertain outcome along with a complex and volatile mix of equity and cash.
The Paramount offer for the entirety of WBD provides shareholders $18 billion more in cash than the Netflix consideration. WBD’s Board of Directors recommendation of the Netflix transaction over Paramount’s offer is based on an illusory prospective valuation of Global Networks that is unsupported by the business fundamentals and encumbered by high levels of financial leverage assigned to the entity.
David Ellison, Chairman and CEO of Paramount, said: “WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company. Our public offer, which is on the same terms we provided to the Warner Bros. Discovery Board of Directors in private, provides superior value, and a more certain and quicker path to completion. We believe the WBD Board of Directors is pursuing an inferior proposal which exposes shareholders to a mix of cash and stock, an uncertain future trading value of the Global Networks linear cable business and a challenging regulatory approval process. We are taking our offer directly to shareholders to give them the opportunity to act in their own best interests and maximize the value of their shares.”
Paramount’s lawyers wrote a letter to WBD after the company rejected three of its offers, raising questions about the “fairness” of the bidding process and alleging that it “favors a single bidder,” as reported by CNBC. David Ellison said during an interview with CNBC on Monday that Netflix’s merger with WBD would create a company with “unprecedented market power,” claiming that it would hurt consumers, Hollywood, and the creative community.
Trump commented on Netflix’s plan to acquire Warner Bros. on Sunday, saying the deal “could be a problem” and that he’ll “be involved in the decision” to approve it. Filings seen by The New York Times state that Netflix would pay a $5.8 billion fee to WBD if its deal doesn’t go through, while WBD would pay Netflix $2.8 billion if it accepts an unsolicited offer instead.
Follow topics and authors from this story to see more like this in your personalized homepage feed and to receive email updates.