Photo Credit: Brad Weaver
The Warner Bros. Discovery board is expected to reject the amended takeover offer from Paramount Skydance. The offer came after Warner Bros. Discovery had already struck an agreement to merge with Netflix in a deal worth $80 billion+.
Paramount Skydance isn’t giving up on the takeover offer, making a tender offer to WBD shareholders. Shares of WBD have soared more than 170% after trading at less than $10 for most of 2024. Bloomberg reports that the WBD board is expected to meet early next week to formally vote on Paramount’s latest offer, though representatives for WBD have declined to comment.
Paramount’s amended offer largely dealt with the financing of an all-cash transaction. Oracle billionaire Larry Ellison—father of David Ellison—made some assurances about the sources of Paramount’s funding for the offer. Larry Ellison enlarged his personal stake in the transaction by making an “irrevocable personal guarantee of $40.4 billion” towards the $108 billion all-cash bid Paramount made for Warner Bros. Discover.
That amended offer also upped the breakup fee to match Netflix’s $5.8 billion figure, which is payable to WBD should the deal not clear regulatory scrutiny. Netflix’s deal to acquire Warner Bros. Discovery is valued at just under $83 billion, but does not include the linear cable channels. Netflix’s bid is also not an all-cash affair, but rather a mixture of cash and stock.
Netflix is hoping to acquire WBD’s film studio and streaming operations, including Warner Bros. Pictures and HBO. That deal is structured as a separation, with WBD spinning off its global networks and linear TV businesses into a standalone company, while Netflix would take the studio and direct-to-consumer assets, while folding DC, HBO, and Warner franchises into its platform.
Skydance-backed Paramount’s unsolicited, all-cash hostile bid to acquire all of WBD includes the CNN and cable networks at roughly $30 a share. Paramount contends that its proposal offers more money and “greater certainty” by taking the entire company, rather than portioning it off. WBD’s board is urging shareholders to support the Netflix transaction, saying it delivers higher value and more reliable financing than Paramount’s bid, which leans heavily on new debt and equity commitments.
