Paramount launches $108 billion bid for Warner Bros
New York, US, (EFE).
Paramount Skydance launched a hostile takeover bid for Warner Bros. Discovery (WBD) on Monday, offering shareholders 30 dollars per share in cash, a proposal valued at 108.4 billion, directly challenging the 27.75 dollar-per-share-cash-and-stock deal WBD has already agreed to with Netflix.
The all-cash proposal surpasses Netflix’s 83 billion dollar agreement to acquire a major portion of WBD, which was approved by the boards of both companies last week.
Paramount Skydance CEO David Ellison said the company was taking its offer directly to shareholders after WBD rejected an identical bid last week.
“We made an offer to their board on December 1. We had a conversation with David Zaslav,” Ellison told CNBC. “He came back with a series of issues. On Dec. 4, we sent an offer that addressed every one of them, one that is superior to the deal they signed.”
Ellison said Monday’s bid includes “30 dollars per share, all in cash, 41 billion dollars in equity backed by the Ellison family and RedBird, and 54 billion dollars in debt commitments from Citi, Bank of America, and Apollo.”
He argued that Paramount’s proposal offers shareholders a significantly better return.
“We’re on Wall Street, where cash is still king. We’re offering shareholders USD 17.6 billion more in cash than the deal they currently have with Netflix,” Ellison said. “We believe that when they see what our offer includes, they will vote in favor.”
Paramount: Netflix deal is ‘inferior’ and risky
In a statement, Paramount said it was appealing directly to WBD investors because the company’s board was “pursuing an inferior proposal” that would involve “a complicated regulatory approval process.”
Paramount claims its offer delivers 18 billion dollars more in cash to shareholders than the Netflix transaction.
The company also warned that a merger between Netflix, with 310 million global subscribers, and WBD could severely distort the entertainment market.
“When you combine the number-one streamer with the number three, you create a company with unprecedented market power, more than 400 million subscribers,” Ellison said. “The next largest competitor would be Disney, with just under 200 million. That’s bad for Hollywood, bad for the creative community, and bad for consumers.”
Market reaction and industry implications
Following the announcement, Paramount Skydance shares rose more than 5.5%, WBD climbed nearly 6%, while Netflix fell over 4.5%.
Paramount’s bid covers the entirety of WBD, including Warner Bros. film studio, HBO Max, and the company’s cable networks, among them CNN.
Cable channels are not part of the Netflix acquisition plan.
The outcome now depends on shareholder response and potential regulatory scrutiny as the battle for control of one of Hollywood’s most powerful media groups intensifies.
