Comcast Chairman Says Company Better at Exploring Warner Bros. Discovery Offer despite a low probability of success
Comcast Chairman and soon-to-be co-CEO Mike Cavanagh admitted Monday that the media giant doesn’t expect to have “a strong chance of prevailing” in the bidding war for Warner Bros. Discovery.
“We didn’t expect to have a strong chance of winning with the deal that we thought made sense. So we debated whether to worry about it or not. Do we want the disruption? Do we want the distraction and so on,” Cavanagh said at an investor conference hosted by UBS on Monday. “But it’s our job, so we thought we’d better take a look at it, do the work and see where it goes. You never know. And that’s what we did.”
Cavanagh noted that Comcast was not interested in straining the company’s balance sheet, resulting in a “lightweight” offer compared to competing proposals in terms of liquidity.
“What we offered was a significant share of equity in a combined entertainment company that would have combined Universal Parks, Media and Studios with Warner Brothers’ studios and streaming segment, and would provide Warner Brothers shareholders with a substantial percentage of that company, and that company would have been a publicly traded and controlled subsidiary of Comcast,” Cavanagh continued. “It all added up to a proposition that made sense to us given that we love what we do, we don’t need to do anything else. If that had happened, I think it would have been an interesting play. It probably would have changed our streaming aspirations to become global streaming aspirations out of necessity, but otherwise we respect and understand the decision of the Warner Brothers board. Obviously they prefer the certainty of high levels of cash or collared stock and not this what we were prepared to do to achieve this.
His comments come after Netflix came out on top in a bidding war for Warner Bros. Discovery, the two companies having reached an $82.7 billion deal that will see the former acquire the studio and streaming assets of the latter for $27.75 per share, including $23.25 in cash plus $4.50 in Netflix stock.
In addition to Comcast’s bid for the studio and streaming assets, Paramount submitted several offers for the entire company. The David Ellison-led media giant has since launched a hostile takeover bid valued at $30 per share, calling the Netflix deal “inferior.”
More to come…
