Warner Bros Discovery rejects Paramount’s $108 billion hostile takeover bid
The Warner Bros Discovery board have officially rejected Paramount’s audacious $108 billion takeover bid.
Last week, despite Warner Bros Discovery previously announcing a deal with Netflix, Paramount Skydance, owned by David Ellison, unleashed a hostile takeover bid at $30 a share.
The $30 a share bid would have also included Warner Bros Discover’s cable businesses, such as CNN and TNT, as well as the streaming and studio side of the business.
Additionally, their $108 billion offer would 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.
However, shareholders have now been urged by Warner Bros Discovery to reject the lucrative offer in favour of the deal with Netflix.
Samuel A Di Piazza Jr, chair of the Warner Bros Discovery board of directors, said in a statement regarding the decision, “Following a careful evaluation of Paramount’s recently launched tender offer, the Board concluded that the offer’s value is inadequate, with significant risks and costs imposed on our shareholders”
Di Piazza Jr continued, “This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals.”
He concluded the statement by reaffirming Warner Bros Discovery’s ambitions to fulfil their agreement with Netflix, adding, “We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination.”
According to the Financial Times, a key reason why Warner Bros Discovery prefer Netflix’s offer is due to Paramount’s being backed by the Ellison family trust rather than the personal finances of Larry Ellison, the second richest man in the world.
Upon bidding for Warner Bros Discovery, David Ellison 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.”
It now remains to be seen what happens next and whether Paramount Skydance raise the stakes once again with a new offer.
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