Warner Bros board rejects hostile takeover bid from Paramount as Netflix deal looms
Warner Bros called the offer “illusory,” and accused Paramount of misleading its shareholders over the financing.
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Warner Bros called the offer “illusory,” and accused Paramount of misleading its shareholders over the financing.
The board of Warner Bros Discovery rejected Paramount’s bid on Wednesday. Warner Bros board has stated that Paramount Skydance’s $108 billion hostile takeover bid is lacking in adequate financing assurances, according to Reuters. Warner Bros called the offer “illusory,” and accused Paramount of misleading its shareholders over the financing.
Netflix announced an agreement with Warner Bros Discovery (including HBO and its studios), on Dec 5 to acquire Warner Bros for $82.7 billion. A press release read, “Today, Netflix, Inc (the Company) and Warner Bros. Discovery, Inc. (WBD) announced they have entered into a definitive agreement under which Netflix will acquire Warner Bros., including its film and television studios, HBO Max and HBO.”
Paramount issued a hostile offer on December 8, meaning that it goes directly to the shareholders. “The Paramount offer for the entirety of WBD provides shareholders $18 billion more in cash than the Netflix consideration,” Paramount stated. The statement went on to say, “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’s CEO, David Ellison, said, “WBD shareholders deserved an opportunity to consider our superior all-cash offer for their shares in the company,” and continued, “we are taking our offer directly to the shareholders to give them the opportunity to act in their own best interests and maximize the value of their shares.”
President Trump had stated on Dec. 7 that he may be involved with the Netflix/Warner Bros. deal. He said when asked about the deal, "They have a very big market share," referring to Netflix, and, “and when they have Warner Brothers, you know, that share goes up a lot.” He added, “so, I don’t know, that’s going to be for some economists to tell, I’ll be involved in that decision too.” Of Netflix CEO Ted Sarandos, Trump said, “He’s done one of the greatest jobs in the history of movies and other things, and he’s got a lot of interesting things happening, aside from what you’re talking about, ” then said that the big market share that would be owned by Netflix could be a “problem.”
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