Paramount Skydance Launches $108.4 Billion Hostile Bid for Warner Bros. Discovery following Netflix News
Last week we learned that Netflix and Warner Bros. Discovery had agreed to an acquisition that would cost the streaming platform a whopping $72 billion (with an enterprise value of $82.7 billion).
Paramount Skydance was eager to add Warner Bros. to his portfolio, and David Ellison is not taking this loss in stride.
The company announced plans to launch a hostile bid for Warner Bros. with an all-cash tender offer to acquire all of the outstanding shares of WBD at a price of $30 per share. The difference is that Paramount is looking to take over the company’s television businesses, including CNN, TBS and TNT. Netflix is second only to Warner Bros. Pictures and HBO.
This all-cash offer equates to an enterprise value of $108.4 billion, and Paramount believes it’s a much better deal for shareholders.
“Paramount’s strategically and financially attractive offer to WBD shareholders provides a superior alternative to the Netflix transaction,” the company said today, “which offers lower and uncertain value and exposes WBD shareholders to a lengthy, multi-jurisdictional regulatory approval process with an uncertain outcome, as well as a complex and volatile mix of shares and cash.”
Paramount’s $30/share offer is backed by Oracle co-founder Larry Ellison, David Ellison’s father, and RedBird Capital Partners.
David Ellison today released the following statement:
“WBD stockholders deserve the opportunity to consider our superior all-cash offer for their shares in the entire company. Our public offer, which is subject to the same conditions that we have proposed to the Warner Bros. Discovery board privately, provides superior value and a safer and faster path to completion.”
“We believe the WBD board is pursuing an inferior proposal that exposes shareholders to a mix of cash and stock, uncertain future business value of Global Networks’ linear cable business, and a difficult regulatory approval process. We are submitting our offer directly to shareholders to give them the opportunity to act in their own interest and maximize the value of their shares.
Last night, President Donald Trump expressed concerns about Netflix’s plans to buy Warner Bros.’s movie studios and cable/streaming platforms. Discovery.
Recognizing that Netflix has a “large market share” and the combined size of the companies “could be a problem”, the commander in chief later said the streaming service already had a “a very large market share” what would be “go up a lot” if the deal goes through.
Trump also confirmed that Netflix co-CEO Ted Sarandos recently visited the White House. “I have a lot of respect for him. He’s a great person. He’s done one of the greatest works in the history of cinema,” he said, later adding that he would be directly involved in the regulatory process.
As a reminder, it has been reported that the Ellisons are close friends of the president. However, Trump just took to social media to declare that Ellison-owned Paramount is “no better than the old property”, as he attacked the company during a 60 Minutes interview with nemesis’ new rep, Marjorie Taylor Greene.
Stay tuned for updates as we have them.
