Paramount Skydance has launched a hostile bid worth $108.4 billion for Warner Bros. Discovery, throwing a wrench into a $72-billion deal with Netflix Inc. that would've created a streaming behemoth.
Paramount is offering Warner Bros. shareholders $30/share—a 139% premium over the stock price of $12.54 in September, when the takeover talks first began. Netflix is offering $28/share.
In a statement, Paramount called Netflix's bid “inferior and uncertain”.
"WBD shareholders deserve an opportunity to consider our superior all-cash offer," Paramount CEO David Ellison said.
Netflix-Warner Bros Deal
Netflix had emerged victorious on Friday after a weeks-long bidding war with Paramount and Comcast, securing a $72-billion equity deal for Warner Bros. Discovery's TV, film studios and streaming assets—including HBO. The offer—which is worth $82.7 billion including debt and comes with a $5.8 billion breakup fee from Netflix—is likely to face strong antitrust scrutiny.
Paramount did submit multiple offers but faced rejections. It had sent a letter to Warner Bros., questioning the sale process and alleging the company has abandoned a fair bidding process and predetermined Netflix as the winner.
That followed reports that Warner Bros.' management called the Netflix deal a “slam dun” while speaking negatively about Paramount's offer.
In comes Paramount Skydance
{{/usCountry}}That followed reports that Warner Bros.' management called the Netflix deal a “slam dun” while speaking negatively about Paramount's offer.
In comes Paramount Skydance
{{/usCountry}}According to analysts and industry experts, Paramount is the best candidate to acquire Warner Bros. Discovery, given Ellison's deep pockets — backed by his father Oracle Corp.'s co-founder and the world's second-richest person Larry Ellison and the close ties with the Trump administration.
On Sunday, US President Donald Trump told reporters that the Netflix-Warner Bros combo could raise market share concerns and he would have a say on the deal.
Antitrust Concerns
Netflix's bid has already drawn sharp criticism from bipartisan lawmakers and Hollywood unions on concerns that it could lead to job cuts as well as higher prices for consumers.
Looking to allay anti-trust fears, Sarandos had said the deal would drive value for consumers, shareholders and talent, saying Netflix is “highly confident” in the regulatory process.
Analysts said access to Warner Bros. vast IP would provide Netflix immediate credibility, audience and merchandise potential for its gaming ambitions—an area where Netflix is still building original content and brand recognition.