Paramount launched an all-cash tender offer yesterday to acquire Warner Bros Discovery (WBD) for $30 per share, challenging a previously announced deal between WBD and Netflix.
The hostile offer sets up a furious battle between Paramount – whose owner Larry Ellison is an ally of Donald Trump – and streaming behemoth Netflix to buy one of Hollywood’s most storied studios.
Netflix shocked the industry last week by announcing it had sealed an agreement to buy the Warner Bros studio, drawing bitter reactions from voices in Hollywood worried about the future of their industry.
Trump weighed in on Sunday, saying Netflix’s effort to acquire Warner Bros “could be a problem” as it would be left with a huge market share of the film and TV industry.
“We’re really here to finish what we started,” David Ellison, chairman and CEO of Paramount, told CNBC as his company made a sixth offer for Warner Bros since the bidding war began.
Unlike Netflix’s offer, Paramount’s latest bid includes cable channels such as CNN, TNT, TBS and Discovery.
It would put the properties under the ownership of a company with close ties to the Trump administration.
The offer values the entertainment giant at $108.4 billion and represents a 139 per cent premium over WBD’s September stock price of $12.54, when the bidding war began.
Paramount in a statement called Netflix’s bid, which values Warner Bros studios at nearly $83bn, “inferior and uncertain.”
“WBD shareholders deserve an opportunity to consider our superior all-cash offer,” Ellison said.
Over the decades, Warner Brothers has produced film classics including Casablanca and Citizen Kane, as well as more recent blockbuster shows including The Sopranos, Game of Thrones and the Harry Potter movies.
Paramount argued its deal provides greater regulatory certainty than the Netflix transaction, which it said would give Netflix a 43pc share of global streaming subscribers and face “protracted regulatory challenges across the world.”
The combined company would unite Paramount’s portfolio – including Paramount Pictures, CBS, Nickelodeon and Paramount+ – with WBD’s assets including HBO Max and major sports rights.
Paramount said the merger would generate more than $6bn in cost savings while maintaining theatrical releases and increased content spending.
Keeping movies in theatres is a very sensitive issue for the creative industry in Hollywood.
Netflix is already viewed negatively in some Hollywood circles, largely due to its reluctance to release content in theatres and its disruption of traditional industry practices.
Many industry veterans consider theatrical releases essential to cinema’s appeal and prestige, and also integral to keeping a healthy Hollywood economy.
Warner Bros Discovery’s share price skyrocketed by more than 7pc yesterday while shares in Netflix fell by more than 2pc.
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