Paramount Skydance launched a hostile takeover bid for Warner Bros. Discovery (WBD) on Monday by going directly to shareholders with a cash offer of $30 per share, valuing the company at $108.4 billion.
The offer would be above Netflix’s winning proposal to purchase WBD for $27.75 in cash and stock.
Paramount Skydance CEO David Ellison said Monday that his company launched the $30 per share takeover offer, the same offer that was rejected by WBD last week, “to finish what they started.”
“Just to walk you through how we got here: on December 1, we made an offer to your board of directors to acquire WBD. We had a conversation with David Zaslav (CEO of WBD). He came back with a series of problems. We, on December 4, submitted an offer that addressed each of them, which is superior to the offer they signed,” Ellison explained in an interview with CNBC.
According to Ellison, today’s offer is: “$30 per share, all cash, $41 billion in equity backed by the Ellison family and RedBird and $54 billion in debt with commitments from Citi, Bank of America and Apollo.”
However, the Netflix platform announced last Friday that it had offered $83 billion to buy a significant portion of WBD, a deal approved by the boards of directors of both companies.
Paramount Skydance wants to snatch Warner Bros. buyout from Netflix
“Paramount’s offer for all of WBD provides shareholders with $18 billion more in cash than Netflix’s consideration,” Paramount said Monday in a statement.
The company said it was addressing shareholders because WBD’s board of directors is “pursuing an inferior proposal” that would lead to “a complicated regulatory approval process.”
“We’re on Wall Street, where cash is still king. We are offering shareholders $17.6 billion more in cash than the deal they currently have with Netflix, and we believe that when they see what our offer includes, they will vote for it,” Ellison said today.
Following today’s news, Paramount Skydance shares were up more than 5.5%, WBD stock was up nearly 6%, while Netflix shares were down more than 4.5%.
Ellison also highlighted that the deal between Netflix and WBD could hurt Hollywood, as Netflix has 310 million global subscribers.
“When you combine the number one streamer with the number three streamer, that creates a company that has unprecedented market power, over 400 million subscribers. The next biggest competitor is Disney, with just under 200 million. That’s bad for Hollywood, it’s bad for the creative community, it’s bad for consumers,” the executive noted.
Paramount has offered to buy the entirety of WBD, including the Warner Bros. movie studio, streaming service HBO Max and a portfolio of cable channels, including CNN.
Cable channels are not part of the agreement with Netflix, reported Agencia EFE.
Find out more at ‘QueOnnda.com’.
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