Paramount Prepares For Hostile Takeover of Warner Bros. Discovery For $108 Billion

Los Angeles, December 8 - A few days after Netflix won the bidding war to acquire Warner Bros. Pictures, HBO, and HBO Max for $82 billion, David Ellison-led Paramount Skydance has launched a hostile offer to acquire all of Warner Bros. Discovery for $30 per share.

According to Paramount (via Variety), its all-cash offer equates to an enterprise value of $108.4 billion. In contrast, the Netflix proposal deal is valued at $27.75/share in a mix of cash ($23.25) and stock ($4.50), subject to a collar and the future performance of Netflix, equating to an enterprise value of $82.7 billion (excluding the TV biz), per Paramount.

Paramount sharply criticised the Netflix deal, calling it uncertain, inferior, and burdened by long regulatory timelines. "Paramount's strategically and financially compelling offer to WBD shareholders provides a superior alternative to the Netflix transaction, which offers inferior and uncertain value and exposes WBD shareholders to a protracted multi-jurisdictional regulatory clearance process with an uncertain outcome, along with a complex and volatile mix of equity and cash," the company said.

This move follows months of Ellison's attempts to acquire WBD. His earlier trio of bids, including an $23.50/share offer (80% cash, 20% stock), were rejected by the WBD board in October. On December 1, Paramount returned with a renewed all-cash offer of $30/share, but the board instead selected Netflix's proposal for the studio and streaming assets.

On Monday, the Paramount CEO said 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 allow them to act in their own best interests and maximise the value of their shares."

To take its case directly to investors, Paramount launched a new website, strongerhollywood.com, offering detailed breakdowns of the proposal and attacking the Netflix alternative. The company claims its acquisition could be completed in 12 months, compared to Netflix's 12–18 month expected window, conditional on regulatory approval.

Stay tuned...