Paramount has just issued a rival bid worth US$108.4 billion (~RM1.848 trillion) for Warner Bros Discovery (WBD) in a last-ditch effort to secure the media conglomerate from Netflix. Moreover, Paramount is making its pitch directly to WBD shareholders with an all-cash offer of US$30 (~RM123) per share that expires on 8 January.
For those unaware, Netflix was able to outbid Paramount and Comcast after a weeks-long bidding war, securing a US$72 billion (~RM295.9 billion) equity deal. But this deal is only for WBD’s streaming and studio assets, which includes HBO Max and Warner Bros. film, TV, and game studios.
What sets Paramount’s offer apart, however, is that it’s for all of WBD. For reference, this includes the company’s cable channels (Global Networks), which are Discovery, CNN, Cartoon Network, and TNT, to name a few. “WBD’s Board of Directors recommendation of the Netflix transaction over Paramount’s offer is based on an illusory prospective valuation of Global Networks that is unsupported by the business fundamentals and encumbered by high levels of financial leverage assigned to the entity,” Paramount said in a press release.
Before WBD accepted Netflix’s offer, Paramount sent a letter to CEO David Zaslav challenging the ‘fairness and adequacy’ of the sale process. It questioned whether WBD was prioritising shareholders’ best interests, as the management team seemed to favour the streaming giant’s offer.
“Despite Paramount submitting six proposals over the course of 12 weeks, WBD never engaged meaningfully with these proposals which we believe deliver the best outcome for WBD shareholders,” Paramount said. “Paramount has now taken its offer directly to WBD shareholders and its Board of Directors to ensure they have the opportunity to pursue this clearly superior alternative.”
The company also argues that this offer will receive fewer regulatory issues compared to Netflix’s offer. CNBC reports that Paramount executives think the company’s smaller size and its stable ties with the Trump administration could help streamline the regulatory process. Not only that, but President Donald Trump said it himself that Netflix’s bid has to go through a process, but its big market share “could be a problem.”
In a statement to Variety, WBD said it will consider Paramount’s latest bid and “intends to advise its stockholders of the Board’s recommendation regarding Paramount Skydance’s tender offer within 10 business days.” The company is expected to announce its final decision on 19 December, and until then, the WBD board will take no action on either the Netflix agreement or Paramount’s proposal.
At the same time, Netflix co-CEO Ted Sarandos said that Paramount’s offer was “entirely expected.” He added that they are extremely happy with the deal and believe it is best for both consumers and shareholders. Sarandos also expressed confidence that Netflix will successfully complete the acquisition.
