Warner Bros. Discovery (WBD) is in the midst of a competitive bidding situation following a $30-a-share cash offer from Paramount Skydance, which was eclipsed by a bid from Netflix at $30.75 per share. Shortly after Netflix’s superior offer, WBD’s board, led by CEO David Zaslav, agreed to accept Netflix’s proposal, sparking dissatisfaction from the Ellison family, who own Paramount Skydance.
Sources indicate that the Ellisons are considering a direct appeal to WBD’s shareholders, expressing concerns over the perceived advantages stemming from the relationship between Zaslav and Netflix’s chief, Ted Sarandos. They believe that their bid, despite initial rejection, could still hold merit if they can present a counteroffer of around $35 per share, which would account for any necessary breakup fees owed to Netflix.
Amid the negotiations, Zaslav is open to further offers but remains skeptical of Paramount Skydance’s financial stability. Netflix has a higher market cap and cash reserves, making their bid more attractive in WBD’s eyes. Discussions within WBD have reportedly included worries that Paramount Skydance is not only lacking in profitability but also unclear in its financial underpinnings for a higher bid.
The Ellisons have signaled a readiness to move toward a potentially hostile bid if they feel misrepresented or undermined in the negotiation process. They aim to assert that their bid provides value, especially since they believe the value attributed to WBD’s cable assets is underestimated.
As discussions continue, the outcome remains uncertain, with both sides preparing for potential further negotiations.
Bold Points:
- Why this story matters: The outcome of this bidding war could reshape the media landscape significantly.
- Key takeaway: Netflix has emerged as the front-runner in the bidding for WBD, but Paramount Skydance is still considering counteroffers.
- Opposing viewpoint: The Ellisons claim the bidding process favors Netflix unfairly and assert their offer is more valuable than currently recognized.
