Paramount launched a hostile, all-cash bid against Netflix to acquire Warner Bros. Discovery for $30 per share.
The Skydance company’s competitive bid comes just days after Netflix announced that it entered a “definitive agreement” with Warner Bros. to purchase it and its HBO Max and HBO studios for $27.75 per share. Netflix won the streaming services bidding war against Paramount and Comcast on Friday. However, on Monday, Paramount showed that it will not back down from the fight.
“WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company,” Paramount CEO and Chairman David Ellison said in a statement. “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.”
Ellison called out Netflix’s offer as “inferior,” following weeks of tension as Paramount warned about a Warner Bros. deal with Netflix. He said his company will take its offer directly to shareholders.
“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. “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.”
Paramount’s offer equates to an enterprise value of $108.4 billion, which it said is approximately $18 billion more in cash than the $82.7 billion enterprise value bid by Netflix.
Ellison is the son of Larry Ellison, the founder of Oracle and a longtime ally and supporter of President Donald Trump.
“I’m incredibly grateful for the relations that I have with the president, and I also believe he believes in competition,” Ellison said on CNBC. “And when you fundamentally look at the marketplace, allowing the No. 1 streaming service to combine with the No. 3 streaming service is anti-competitive.”
Trump has expressed skepticism about the Netflix agreement with Warner Bros., saying it “could be a problem.”
Affinity Partners is a part of Paramount’s bid for Warner Bros., according to Axios. The private equity firm, owned by Trump’s son-in-law, Jared Kushner, is an “outside financing partner” and has “agreed to forgo any governance rights — including board representation — associated with their non-voting equity investment,” according to an SEC filing reported by the outlet.
Paramount, which has faced criticism over its July $8 billion merger, has pitched itself as the company with an easier path to regulatory approval than Netflix.
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Prior to Netflix announcing its agreement with Warner Bros., Paramount railed against the bidding process to Warner Bros. CEO David Zaslav. It expressed its “serious concerns about the fairness and adequacy” of the process.
“The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s attorneys wrote in a letter. “Netflix is the only remaining Big Tech company that has not faced serious global antitrust enforcement, but attempting to acquire the WBD assets will change that.”
