Paramount launches hostile takeover of Warner Bros for $108 billion despite Netflix agreeing acquisition
Paramount has launched a hostile takeover of Warner Bros despite Netflix confirming their acquisition on December 5th.
Netflix announced the deal only days ago, after seemingly beating competition from Paramount Skydance, as well as Comcast. However, this could now change at the 11th hour.
David Ellison’s company has launched an all-cash $30 a share bid for Warner Bros, which also includes its cable businesses as well as the streaming and studio side of the business.
The huge $108 billion offer will also see Paramount pay an extra $18 billion in cash compared with Netflix, whose $27.25 per share offer comprised of a mix of cash and stock.
In a statement, Paramount said of their bid: “Despite Paramount submitting six proposals over the course of 12 weeks, WBD never engaged meaningfully with these proposals which we believe deliver the best outcome for WBD shareholder.”
It continued, “Paramount has now taken its offer directly to WBD shareholders and its Board of Directors to ensure they have the opportunity to pursue this clearly superior alternative.”
Meanwhile, Ellison said of his intentions: “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.”
He also said of Netflix’s offer, “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 concluded, “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.”
The bid from Paramount comes after Donald Trump, who has links to the Ellison family, stated that Netflix taking over Warner Bros “could be a problem,” before adding that the deal would have to “go through a process and we’ll see what happens”.
While Netflix has agreed to a deal with Warner Bros, it is yet to be approved by the relevant bodies. Notably, if the Netflix acquisition of Warner Bros isn’t given the green light, the streaming service has agreed to pay a $5.8 billion penalty fee, which would be the largest in history.
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