Paramount has initiated a $108 billion hostile bid to acquire Warner Bros. Discovery, partnering with Middle Eastern sovereign wealth funds and Jared Kushner to challenge Netflix’s recently agreed-upon deal. The all-cash offer, valuing Warner at $30 per share, is $18 billion more than Netflix’s earlier proposal. Paramount’s CEO, David Ellison, criticized Netflix’s offer as “inferior.”
This move follows a three-month auction, where Netflix had previously secured an $82.7 billion deal for Warner’s studio assets, including properties like the Harry Potter franchise and HBO Max. Netflix’s bid has faced scrutiny from unions, with former President Trump stating he would review the transaction. Netflix’s proposal valued Warner’s assets at $27.75 per share but did not include certain cable assets like Discovery and CNN, which Warner aims to spin off next year. Analysts estimate those cable assets could be valued at about $4 per share, whereas Paramount’s offer values them at $1.
Paramount is trying to sway Warner shareholders by questioning Netflix’s capability to gain antitrust approval, arguing that Netflix’s timeline of 12 to 18 months for regulatory consent is unrealistic. Shareholders will vote on Paramount’s offer by January 8, but the deadline may be extended.
Ellison warned that if Netflix acquires Warner, it could result in diminished competition in Hollywood. While Trump expressed concerns about the market share of Netflix, he acknowledged the potential of Netflix’s CEO.
Despite presenting multiple bids, Paramount accused Warner of not engaging meaningfully with its offers, prompting them to go directly to Warner’s shareholders. Meanwhile, Warner’s board has favored Netflix for its perceived reliability in finalizing the deal.
- Why this story matters: The outcome has significant implications for competition in the media landscape and potential regulatory scrutiny.
- Key takeaway: Paramount’s substantial bid seeks to alter the media acquisition landscape amid Netflix’s established deal with Warner.
- Opposing viewpoint: proponents of Netflix argue that the deal will enhance creative opportunities and expand content availability.
