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.
A hostile takeover occurs when a company tries to take over another company by going around the takeover target’s management and making an appeal directly to shareholders. While such takeovers are less likely to be successful than friendly, agreed-upon acquisitions, and are risky and costly, they do tend to occasionally succeed.
If Paramount’s $30-per-share, all-cash bid worth $108 billion (including debt) for complete ownership of WBD succeeds, it’ll be the fourth-largest hostile takeover to be completed over the past 20 years, according to data Dealogic shared with CNN. And oftentimes the initial hostile takeover bid a company announces goes even higher.
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The top successful hostile takeovers include the takeover of Mannesmann by Vodafone Airtouch, SABMiller by Anheuser-Busch InBev, Warner-Lambert by Pfizer, ABN Amro by Royal Bank of Scotland Group, and Aventis by Sanofi-Synthelabo.
In 1999, UK-based telecom company Vodafone Airtouch (now Vodafone Group) first presented the board of German telecom company Mannesmann with an all-stock acquisition. When Mannesmann rejected the bid, Vodafone proceeded with a hostile takeover bid to buy Mannesmann shares that was finalized in 2000 and valued at $171 billion.
Anheuser-Busch, which had already been subject to a hostile takeover by InBev had formed a company that later became known as Anheuser-Busch InBev. That company then launched a hostile takeover bid for SABMiller in 2015 after it failed repeatedly at friendly takeover attempts. The negotiated deal settled at $122 billion in 2016.
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Pfizer succeeded with its hostile takeover bid of Warner-Lambert, a pharmaceutical company known for making the cholesterol-lowering drug Lipitor, in 2000. The all-stock deal closed at $110 billion that year.
Royal Bank of Scotland, seeking to prevent a friendly takeover of Dutch bank ABN Amro by Barclays, got two other banks to collectively make a hostile bid that would divide ABM among all three. It was eventually finalized in 2007 in a deal valued at $96 billion. Sanofi-Synthelabo’s surprise hostile takeover bid of Aventis, a Franco-German pharmaceutical company, was valued at $73 billion in 2004.
WBD had said in a statement about Paramount’s bid that 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.