Paramount Skydance on Monday launched a hostile, $108.4 billion bid to acquire Warner Bros. Discovery, days after Warner agreed to be purchased by Netflix for $82.7 billion.
Paramount is appealing directly to WBD’s shareholders with an all-cash offer of $30 per share, noting that its proposal provides shareholders $18 billion more cash than the Netflix deal, which offered $23.25 in cash and $4.50 in Netflix shares for a total of $27.75 per share.
Paramount is bidding for all of Warner Bros. Discovery, while Netflix’s agreement with the company covers only its Hollywood studios and streaming business, leaving out the cable networks division.
The terms represent the same offer that WBD’s board rejected a week ago, according to reports.
“We believe the WBD Board of Directors is pursuing an inferior proposal which exposes shareholders to a mix of cash and stock, an uncertain future trading value of the Global Networks linear cable business and a challenging regulatory approval process,” Paramount CEO David Ellison said in a statement.
Paramount’s offer is supported with equity financing from the Ellison family and private-equity firm RedBird Capital, in addition to $54 billion of debt commitments from Bank of America, Citi, and Apollo.
Netflix emerged as the winning bidder on Friday after prevailing in a bidding contest against Paramount and Comcast, but Paramount’s hostile bid is certain to prolong the battle for one of Hollywood’s most iconic studios, a fight which has already stretched across months.
Netflix’s proposed deal has already raised antitrust questions, as it would combine two of the most popular streaming platforms into one entity. Additionally, President Donald Trump has stated the deal “could be a problem” because of the size of the combined companies’ market share.
A deal between Warner Bros. Discovery and Paramount would also likely raise similar antitrust concerns given the concentration of entertainment assets.
Netflix agreed to pay WBD $5.8 billion if the deal doesn’t receive approval or falls through. WBD would have to pay Netflix $2.8 billion if it decides to terminate the agreement.
Netflix did not immediately respond to requests for comment on Paramount’s hostile offer.
The hostile bid represents an aggressive escalation in the battle for Warner Bros. Discovery’s assets. Hostile takeover attempts bypass management and board approval by appealing directly to shareholders, who ultimately control the company through their voting rights.
The all-cash structure of Paramount’s offer provides certainty for shareholders compared to Netflix’s mixed consideration. Stock components in acquisition deals carry risk because their value fluctuates with market conditions between announcement and closing.
The $30 per share price represents a significant premium over Netflix’s $27.75 offer. Shareholders facing this choice must weigh the higher cash payment against their assessment of which company represents a better long-term owner.
The rejection by WBD’s board a week ago suggests management preferred Netflix’s proposal despite the lower price. Boards consider factors beyond immediate shareholder value, including strategic fit, regulatory approval likelihood, and transaction certainty.
Ellison’s statement criticizing the board’s decision frames Paramount’s offer as superior across multiple dimensions: higher cash payment, no exposure to uncertain cable business valuations, and potentially easier regulatory approval.
The Global Networks linear cable business referenced includes channels like CNN, TNT, and other traditional television assets. These properties face declining viewership and advertising revenue as audiences shift to streaming, creating valuation uncertainty.
The $54 billion debt commitment from major banks indicates financial institutions believe Paramount can service the substantial borrowing required. The financing package combines equity from existing investors with significant leverage.
The Ellison family’s involvement provides financial backing and credibility. Larry Ellison, founder of Oracle and one of the world’s wealthiest individuals, adds substantial resources through his family’s investment.
RedBird Capital’s participation brings private equity expertise in media transactions. The firm has experience with sports and entertainment assets, making it a logical partner for this acquisition.
Netflix’s victory on Friday appeared to settle the matter after months of negotiations and competing proposals. Paramount’s hostile bid reopens what seemed like a concluded process.
The antitrust concerns surrounding Netflix’s deal stem from combining two major streaming platforms with extensive content libraries. Regulators examine whether such consolidation reduces competition and harms consumers through higher prices or reduced choice.
Trump’s comment about the deal being “a problem” adds political uncertainty to the regulatory review process. Presidential statements can influence how agencies approach merger reviews.
A Paramount-WBD combination would also concentrate significant entertainment assets, though the competitive dynamics differ from a streaming-focused Netflix merger. Paramount brings theatrical release capabilities and additional networks.
The $5.8 billion reverse breakup fee protects WBD if Netflix walks away or fails to secure approval. The $2.8 billion fee protects Netflix if WBD terminates. These substantial penalties discourage either party from abandoning the deal.
