Topline
Paramount on Monday said it has launched a hostile effort to acquire Warner Bros. in a deal that would give shareholders $18 billion more in cash than the $82.7 billion Netflix announced it would pay for the company last week.
Paramount Skydance CEO David Ellison,
AFP via Getty Images
Key Facts
Paramount, run by David Ellison, said it will offer $30 per share for Warner Bros. Discovery, Inc. and slammed the $27.75-per-share Netflix deal as offering “inferior and uncertain value,” and exposing Warner Bros. shareholders to a protracted regulatory clearance process.
Unlike the deal struck with Netflix, which covered Warner’s film studio and streaming service—and would see the company’s Global Networks division, Discovery Global, spun off into a new publicly-traded company next year—Paramount’s offer is for the entirety of Warner Bros. Discovery.
Paramount’s all-cash offer equates to $108.4 billion, while Netflix’s $82.7 billion offer is a mix of cash ($23.25 per share) and stock ($4.50).
The announcement comes one day after President Donald Trump, who counts the billionaire Ellison family as big-time supporters, warned the Netflix deal could draw antitrust scrutiny and said the two entities’ combined streaming market share could “be a problem.”
Netflix said it expected its deal to take 12 to 18 months to close pending required regulatory approvals, approval of Warner shareholders and other conditions, while Paramount said it is “highly confident in achieving expeditious regulatory clearance” under its proposal.
Paramount said it has taken its offer public—and directly to Warner Bros. shareholders—after Warner Bros. “never engaged meaningfully” with six Paramount proposals submitted over the course of 12 weeks.
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Crucial Quote
“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,” Ellison said in a statement Monday.