Warner Bros. Urges Shareholders to Side with Netflix as Paramount Bid Faces Financing and Competition
Paramount's hostile bid for Warner Bros. faces Netflix competition, backed by Larry Ellison's $40.4 billion financing; Warner urges shareholders to favor Netflix amid ongoing negotiations.
Overview
Warner Bros. Discovery's leadership urges shareholders to reject Paramount's hostile $77.9 billion bid and instead consider Netflix's competing offer, highlighting financing concerns and strategic risks.
Paramount secured $40.4 billion in equity financing backed by Larry Ellison's personal guarantee, aimed at shoring up its hostile bid against Warner-Discovery and Netflix.
Paramount has not publicly commented to requests for remark as of Wednesday morning, while Warner Bros. Discovery's latest statements remain unaddressed.
Paramount and Netflix compete to acquire Warner Bros.' studios and content library, pursuing different strategic goals that complicate bid terms and financing arrangements.
Negotiations contemplate a $5.8 billion shareholder payout if regulators block the deals; Warner explores selling assets and potentially spinning off certain units if Netflix prevails.
Analysis
Center-leaning sources portray a pitched corporate power struggle, favoring Warner Bros. Discovery’s stance that the Netflix merger offers superior value and certainty. Across articles, editorial framing emphasizes the risks, debt, and uncertainties of Paramount Skydance’s bid, while casting Netflix as the stable, regulator-friendly path, with quotes from WBD and Netflix highlighting this narrative.
Sources (21)
FAQ
Warner Bros. Discovery rejected Paramount Skydance's revised hostile bid because it is inferior to their $82.7 billion merger agreement with Netflix, posing significant risks, costs, uncertainties, and debt burdens on shareholders.[1]
Netflix agreed to buy Warner Bros. Discovery's HBO network, streaming, and studios business for $27.75 per share, consisting of $23.25 in cash and Netflix stock valued at $4.50, with Warner's cable division to be spun off.[1]
Paramount Skydance is offering $30 per share in an all-cash deal to acquire all of Warner Bros. Discovery, valuing the offer at roughly $108 billion.
Abandoning the Netflix merger would cost Warner Bros. Discovery around $4 billion, including a $2.8 billion termination fee, $1.5 billion debt exchange fee, and $350 million in interest expenses, reducing net shareholder value significantly.[2]
Paramount Skydance has not immediately responded to requests for comment on Warner Bros. Discovery's rejection of their bid.[1]
History
9 sources
8 sources