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Paramount Goes Directly To Shareholders With WBD Bid
Swooping in // Illustration by Kate Walker
Paramount is launching a hostile $108.4 billion takeover bid for Warner Bros. Discovery after the entertainment conglomerate chose Netflix as its buyer.
The Big Picture: David Ellison (with the backing of dad Larry’s enormous vault of Oracle cash) isn’t taking “no” for an answer, alleging that WBD’s bakeoff for ownership was unfair. By taking his tender offer directly to the board and shareholders, Paramount and Netflix will now battle publicly to win the hearts and minds of the people who matter most to the deal — those who own the most stock in WBD.
Behind The Scenes: Unlike Netflix, Paramount is making a play for the entirety of WBD.
Here are the highlights:
The all-cash offer is worth $18 billion more than Netflix’s and includes backing from Apollo Global, Jared Kushner’s Affinity Partners, and three Middle Eastern sovereign wealth funds (Kushner and the funds are allegedly forgoing governance rights).
Paramount stresses that WBD CEO David Zaslav’s plan to get more bang for the company’s buck by spinning out its cable assets is “unsupported by the business fundamentals and encumbered by high levels of financial leverage.”
Paramount launched a website called “StrongerHollywood” that outlines its plans for a combination with WBD, including releasing 30+ movies in theaters and achieving $6 billion in cost savings without cutting creative teams.
Closing Thoughts: Paramount has given WBD shareholders until January 8th to decide… at which point, they’ll likely file a lawsuit, and this bidding war will get even messier. WBD’s board said it will “carefully review and consider” the offer and provide guidance to shareholders within 10 days.
Netflix co-CEOs Ted Sarandos and Greg Peters aren’t going to go quietly, though. Both have kicked off a media blitz, underscoring the soundness of their deal and their desire to be meaningful theatrical players — the biggest points of concern in Hollywood.
But here’s the hundred-billion-dollar question: who does President Trump favor? Although son-in-law Jared Kushner and mega-donor Larry Ellison are involved in the Paramount deal, Trump said of both sides: “None of them are particularly great friends of mine. I want to do what’s right.”
Next Round: Considering the current economic environment, “right” may be whichever company has the most compelling pitch for creating American jobs.
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Today’s email was written by David Vendrell.
Edited by Nick Comney. Polled and Copy-edited by Kait Cunniff.
Published by Darline Salazar.