Posted in: Movies, Opinion, TV, TV | Tagged: netflix, paramount, warner bros discovery

Paramount Launches Hostile Bid Offer to Kill Netflix/Warner Bros Deal

David Ellison's Paramount Skydance is looking to kill the Netflix/Warner Bros. Discovery (WBD) deal, launching a hostile bid for WBD.

Losing out to Netflix over Warner Bros. Discovery (WBD) is not sitting well with David Ellison and the folks over at Paramount Skydance. Earlier today, the news broke that Ellison's company was seeking to terminate the planned $82.7 billion deal by launching a hostile bid directly to WBD's shareholders. In addition, Paramount Skydance has launched an initiative to convince Hollywood that WBD would be better off with Paramount Skydance in terms of the entertainment industry's overall improvement. The tender offer from Paramount Skydance would be for $30/share in cash (compared to Netflix's offer of $27.75/share, which would be a mix of cash and some stock), with shareholders acquiring a stake in the spinout of the linear networks.

A key difference is that while Paramount Skydance is looking to purchase WBD as a whole, Netflix is only eyeing the studios and streaming service. At this point, Paramount Skydance will attempt to convince shareholders that their tender offer is compelling enough to accept instead of signing off on a Netflix/WBD deal. Translation? Expect things to get very ugly and very public very soon – as we can already see.

"The Paramount offer for the entirety of WBD provides shareholders $18 billion more in cash than the Netflix consideration. WBD's Board of Directors recommendation of the Netflix transaction over Paramount's offer is based on an illusory prospective valuation of Global Networks that is unsupported by the business fundamentals and encumbered by high levels of financial leverage assigned to the entity," Paramount Skydance shared in a statement.

"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. 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. 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," Ellison added.

He continued, "We believe our offer will create a stronger Hollywood. It is in the best interests of the creative community, consumers and the movie theater industry. We believe they will benefit from the enhanced competition, higher content spend and theatrical release output, and a greater number of movies in theaters as a result of our proposed transaction. We look forward to working to expeditiously deliver this opportunity so that all stakeholders can begin to capitalize on the benefits of the combined company."

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