Paramount makes a $108.4 billion all-cash offer for Warner Bros Discovery, setting up a bidding war with Netflix over the Hollywood giant
WASHINGTON: Paramount has launched an all-cash tender offer to acquire Warner Bros Discovery, challenging Netflix’s own contested deal for the Hollywood giant.
The hostile bid sets up a bidding war between Paramount and streaming behemoth Netflix, which announced its agreement to buy Warner Bros last week.
Paramount CEO David Ellison, whose father Larry Ellison is financing the offer, told CNBC the company is “really here to finish what we started.”
The latest Paramount bid includes the buyout of cable channels such as CNN, TNT, TBS and Discovery, adding to its TV assets like CBS and MTV.
It values Warner Bros Discovery at $108.4 billion, a 139% premium over the company’s stock price when the bidding war began in September.
Paramount called Netflix’s rival bid, which values the studio at nearly $83 billion, “inferior and uncertain.”
“WBD shareholders deserve an opportunity to consider our superior all-cash offer,” Ellison said.
Investors in the Paramount offer include sovereign wealth companies from Saudi Arabia, Qatar and Abu Dhabi, as well as Affinity Partners, the private equity firm founded by Jared Kushner.
Former US President Donald Trump said on Sunday that Netflix’s deal “could be a problem” due to its potential market share.
Trump also stated he would be “involved” in the government’s decision to approve the deal over competition concerns, breaking from usual practice.
Analyst Ross Benes said the acquisition battle is “far from over” and “could become prolonged.”
Paramount argued its deal provides greater regulatory certainty than Netflix’s transaction, which it said would give Netflix a 43% share of global streaming subscribers.
The combined Paramount and Warner Bros entity would unite assets including Paramount Pictures, CBS, HBO Max and major sports rights.
Paramount said the merger would generate over $6 billion in cost savings while maintaining theatrical releases, a sensitive issue in Hollywood.
Netflix is viewed negatively in some industry circles for its reluctance to release content in cinemas.
Warner Bros Discovery’s share price rose by more than 7% on Monday following the news, while Netflix shares fell by over 3%. – AFP
