Paramount launches a hostile $108 billion bid to snatch Warner from Netflix

Paramount has launched a $108.4 billion hostile takeover bid for Warner Bros. Discovery, calling Netflix’s $83 billion arrangement to purchase the entertainment giant’s studios and streaming service “inferior.” The Paramount proposal, unlike Netflix’s, would also include the linear networks owned by WBD.

Paramount says its deal offers a “superior alternative to the Netflix transaction,” citing the potential for a long regulatory approval process “with an uncertain outcome.” In an interview with CNBC’s David Faber, Paramount Chairman and CEO David Ellison dodged a question about whether his father, Larry Ellison, would sell shares to fund the offer.

Paramount:

Paramount, a Skydance Corporation (NASDAQ: PSKY) (“Paramount”), today announced it has commenced an all-cash tender offer to acquire all of the outstanding shares of Warner Bros. Discovery, Inc. (NASDAQ: WBD) (“WBD”) for $30.00 per share in cash. Paramount’s proposed transaction is for the entirety of WBD, including the Global Networks segment.

Paramount’s strategically and financially compelling offer to WBD shareholders provides a superior alternative to the Netflix (NASDAQ: NFLX) transaction, which offers inferior and uncertain value and exposes WBD shareholders to a protracted multi-jurisdictional regulatory clearance process with an uncertain outcome along with a complex and volatile mix of equity and cash.

The Paramount offer for the entirety of WBD provides shareholders $18 billion more in cash than the Netflix consideration. WBD’s Board of Directors recommendation of the Netflix transaction over Paramount’s offer is based on an illusory prospective valuation of Global Networks that is unsupported by the business fundamentals and encumbered by high levels of financial leverage assigned to the entity.

David Ellison, Chairman and CEO of Paramount, said: “WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company. 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 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. We are taking our offer directly to shareholders to give them the opportunity to act in their own best interests and maximize the value of their shares.”

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