A high-stakes takeover battle has erupted over Warner Bros Discovery, with Paramount mounting a hostile all-cash bid after the media giant’s board backed a rival offer from Netflix.
Paramount has tabled an amended bid totalling $108.4bn for WBD’s entire business, offering $30 per share. The move bypasses the WBD board by approaching shareholders directly, coming after Netflix secured unanimous board support for its $72bn cash and stock proposal valued at $27.75 per share.
WBD shares currently trade around $28 per share.
David Ellison, chairman and chief executive of Paramount, stated: “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.”
He criticised the Netflix proposal, saying: “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.”
Netflix’s bid, made in early December, includes WBD’s television and film studios, back catalogues such as Harry Potter and Game of Thrones, and the HBO Max streaming service. Paramount launched its hostile bid following Netflix’s approach.
However, the WBD board has dismissed Paramount’s claims. In a letter to shareholders, the board warned that Paramount’s financing involves an extraordinary amount of debt totalling $87bn, posing significant risks to deal completion. The board cited “insufficient value, lack of completion certainty by PSKY, and risks and costs to shareholders if PSKY fails.”
Paramount’s revised offer includes $40bn in equity personally guaranteed by Larry Ellison, the Oracle co-founder and father of David Ellison.
Financial analysts have noted that Netflix’s offer has a clearer financing structure and fewer execution risks compared to Paramount’s bid for the entire company, including its cable television business. Potential regulatory scrutiny also arises from Netflix’s dominance in the streaming market.
