According to NBC, Paramount Skydance is launching a hostile takeover bid for Warner Bros. Discovery (WBD) after losing out in a months-long bidding war with Netflix. Paramount Skydance plans to make a direct, all-cash offer of $30 per share to WBD shareholders. This is the same offer that WBD rejected last week, but Paramount Skydance CEO David Ellison said the company never responded to that bid.
The acquisition is backed by equity financing from the Ellison family and private equity firm RedBird Capital, along with $54 billion in debt commitments provided by Bank of America, Citigroup, and Apollo Global Management.
In an interview with CNBC’s Squawk on the Street, David Ellison said: “We’re here to finish what we started. We’ve put the company into play.”
After the news broke, Paramount Skydance shares rose about 5 percent in premarket trading, while WBD shares climbed about 6 percent and Netflix stock dipped slightly.
The battle with Netflix
Last Friday, Netflix announced a $72 billion acquisition of WBD’s film, television, and streaming assets. Paramount Skydance had previously bid for all of WBD’s assets, including its film and streaming divisions as well as television networks such as CNN and TNT Sports. CNBC previously reported that Comcast had also made a bid for WBD’s film and streaming businesses.
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Paramount Skydance has repeatedly told WBD’s board that keeping the company intact serves shareholders’ best interests. Executives also plan to emphasize that, because Paramount Skydance is smaller and maintains friendly relations with the Trump administration, the deal may face a shorter regulatory approval process, according to sources familiar with the matter. Ellison added: “We’ve had very positive communication with the president, but I don’t want to speak for him.”
Netflix’s proposed deal has already triggered antitrust concerns, particularly because it involves the merger of two dominant streaming platforms. CNBC reported that President Donald Trump expressed “high skepticism” about the transaction last Friday and said on Sunday that the combined market share could create “problems.”
Paramount Skydance’s offer and strategy
According to the Associated Press, Paramount Skydance has offered WBD shareholders approximately $74.4 billion, or $30 per share in cash, which is about $18 billion higher than Netflix’s bid. Unlike Netflix’s proposal, Paramount Skydance’s offer covers both WBD’s film and streaming assets as well as its cable television business, and it is urging shareholders to reject Netflix’s deal.
Paramount Skydance criticized Netflix’s proposal, saying it could result in a lengthy, multi-jurisdiction regulatory review with an uncertain outcome, along with a complex mix of stock and cash. The company said it has submitted six separate proposals to WBD over a 12-week period.
David Ellison said: “We believe our offer will build a stronger Hollywood. It is in the best interests of creators, consumers, and the theatrical industry. This transaction will promote competition, increase content spending, and expand theatrical releases, bringing more films to audiences in movie theaters.”
