Entertainment giant Paramount Skydance has kicked off a hostile takeover attempt for Warner Bros Discovery just days after the latter accepted a deal from Netflix.
Paramount has said it will pay $108.4 billion for the entire of Warner Bros Discovery in an all-cash $30/share offer; Netflix’s deal was just for the company’s streaming and studio businesses at $27.75/share.
Netflix’s share price is down 4.81% at the time of writing while Warner Bros Discovery’s is up by 6%.
“WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company,” Paramount boss David Ellison said.
“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.”
Last week, Netflix announced that it was planning to buy Warner Bros for $82.7 billion in a deal that would include the latter’s video games arm. This followed a bidding war for Warner Bros that started when Paramount Skydance made an unsolicited offer for Warner Bros Discovery. Comcast also became involved in the bidding war before Netflix emerged victorious.
Reporting by Bloomberg over the weekend suggested that Paramount Skydance chief David Ellison had expected to prevail. He spoke of the company’s “good relationship with the administration” at Bloomberg’s Screentime event in the summer, and the company advised Warner Bros that “Other potential acquirers of WBD — today or in the future — would need to overcome significant (perhaps insurmountable) hurdles given their dominant market positions.”
In the event, the White House did not raise immediate concerns, although many have been raised by politicians and entertainment industry figures and the deal will be subject to intense regulatory scrutiny. The BBC reports that President Trump has reservations on the deal due to the impact it’ll have on Netflix’s market share, and the Paramount counter-offer is backed by Trump’s son-in-law Jared Kushner.
