Paramount Skydance on Monday launched a hostile bid worth $108.4 billion for Warner Bros. Discovery (WBD). This comes after Netflix struck a deal to buy WBD’s TV, film studios and streaming assets for $27.75 per share, following a fierce bidding war involving Paramount and Comcast.
WBD’s board of directors said it would review Paramount’s offer, but was not modifying its recommendation with respect to Netflix. It advised the company to “take no action at this time” in regard to the Paramount Skydance proposal.
The funding for Paramount’s $30-per-share cash offer comes from Affinity Partners, the investment firm run by Jared Kushner, President Donald Trump’s son-in-law, and several Middle Eastern government-run investment funds, and is backstopped by the Ellison family.
Larry Ellison, the world’s second-richest person, is the father of Paramount Head David Ellison and has close ties to the White House. Trump had stated he would have a say on whether the proposed merger between Netflix and Warner Bros. would go ahead.
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President Trump had also flagged potential concerns over the deal. He reportedly said Netflix has a “big market share” and the firms’ combined size “could be a problem.”
“We’re sitting on Wall Street, where cash is still king,” Ellison told CNBC in an interview Monday.
“We are offering shareholders $17.6 billion more cash than the deal they currently have signed up with Netflix. And we believe when they see what is currently in our offer, then that’s what they’ll vote for.”
Unlike Netflix, Paramount is seeking to buy WBD in its entirety. It notes its offer is worth $108.4 billion for all of WBD, compared to $82.7 billion for Netflix’s offer, which doesn’t include the value of the company’s cable channels. However, by accepting Netflix’s offer, WBD’s board clearly thought that deal was better. According to CNN, it has long been argued that the cable assets will be worth more when spun off than combined with the movie studio and HBO, unlocking significant value for shareholders.
READ: Netflix strikes deal to buy Warner Bros Discovery for $27.75 per share (
Paramount said on Monday that the WBD board should make the decision. “WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company,” Ellison said in a statement. “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.”
WBD, in a statement, said it will review the offer and make a recommendation to shareholders within 10 business days. Netflix co-CEO Ted Sarandos said Friday that he had expected Paramount to counter its bid and he remains confident Netflix’s deal will be completed.
Analysts believe that Paramount’s offer will come with antitrust scrutiny as a consolidation of two major television operators. Last month, Democratic senators warned that such a transaction would result in “one company controlling almost everything Americans watch on TV.”