Paramount Skydance makes $108B hostile bid for Warner Bros. Discovery after Netflix move
CBC
Paramount Skydance on Monday launched a hostile bid worth $108.4 billion US for Warner Bros. Discovery, throwing a wrench into the deal with Netflix in a last-ditch effort to create a media powerhouse that would challenge the dominance of the streaming giant.
Paramount submitted multiple offers starting in September to forge an entertainment powerhouse capable of challenging Netflix and tech giants such as Apple that have expanded into media but faced rejections.
It has offered to buy the whole company at $30 per share, compared with Netflix's nearly $28 per share offer for its assets.
Netflix had emerged victorious on Friday from a weeks-long bidding war with Paramount and Comcast, securing a $72-billion equity deal for Warner Bros. Discovery's TV, film studios and streaming assets. That offer, which is worth $82.7 billion including debt and comes with a $5.8-billion breakup fee from Netflix, is likely to face strong antitrust scrutiny.
U.S. President Donald Trump told reporters on Sunday evening before an event at the Kennedy Center in Washington, D.C., that a Netflix-Warner Bros. combination could raise market share concerns for regulators.
Netflix's bid has also drawn sharp criticism from lawmakers from both U.S. political parties and Hollywood unions on concerns that it could lead to job cuts as well as higher prices for consumers.
In an interview with CNBC on Monday, Paramount CEO David Ellison said there is an "inherent bias" against his company in the bidding.
"We will be the largest investor in this deal. We're literally sitting here today because we are fighting for our shareholders, and we're also fighting for the shareholders of Warner Bros. Discovery," Ellison said.
Analysts and industry experts see Paramount as the best candidate for acquiring Warner Bros. Discovery, given Ellison's deep pockets — backed by his father, Oracle co-founder Larry Ellison, one of the world's richest persons.
Access to WBD's vast intellectual property trove would provide immediate credibility, audience reach and merchandising potential for its gaming ambitions, an area where Netflix is still building original content and brand recognition.
Looking to allay antitrust fears, Netflix co-founder Ted Sarandos had said the deal would drive value for consumers, shareholders and talent and that Netflix is "highly confident" in the regulatory process.
Bloomberg News has reported Trump met Sarandos in mid-November, telling the executive Warner Bros. should sell to the highest bidder. However, Paramount's bid could also face its own level of regulatory scrutiny.
A Paramount-Warner Bros. combination would boost its dominant position in the studio business that some also worry could lead to job losses as the industry rapidly consolidates.
Paramount remains one of Hollywood's major studios, but its box office record has been uneven, with occasional franchise wins offset by periods in which its slate has trailed Disney, Universal and Warner Bros. in U.S. market share. Its last Academy Award win for best picture came in the 1990s.
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