The race to acquire Warner Bros. Discovery is getting more interesting by the day. WBD was recently confirmed to be going up for auction, with Netflix, Comcast and Paramount Skydance preparing a first round of non-binding bids before a November 20 deadline. Following its heavy push to acquire WBD, there seemed to be hesitation from Paramount to continue its bid for the corporation.
That perception changed recently when Variety published a report regarding Paramount's alleged ambitious strategy to acquire Warner Bros. The outlet said that the David Ellison-run corporation had partnered up with three Middle Eastern entities to put together a $71 billion bid for the company. The entities were said to have been the Abu Dhabi Investment Authority, Saudi Arabia's Public Investment Fund, and the Qatar Investment Authority.
At the time, that sounded like a bold move from Ellison. However, following the publication of the article, a representative for Paramount Skydance "categorically" denied the report:
"The information Variety published is categorically inaccurate. This is a confidential process, which we respect and, as such, will not be commenting until the process is over."
The Financial Times separately reported that David Ellison had, "held preliminary talks with Saudi Arabia's sovereign wealth fund and other major Gulf investors" to place a bid for Warner Bros. The outlet further stated that the CEO had met with the kingdom's Public Investment Fund and "other officials from the region" following said parties showing interest in collaborating with Paramount for the offer.
Though Paramount denies the report, the $71 billion amount stated by Variety may not be far off from what Warner Bros. Discovery is expected to go up for, according to another report. In its efforts to acquire WBD, Paramount Skydance sent in three different offers, each one with more enticing bonuses, one of which included making David Zaslav co-CEO of a merged Paramount-WBD corporation. All of them were rejected by Warner Bros. The final offer was said to have been of $23.50 per share, totaling an approximate $58.23 billion for the whole company (via Reuters), paid 80% in cash and 20% in stock.
Per Axios (via Reuters), WBD is now looking for Paramount to increase its offer from $23.50 to approximately $30 per share. This would bring the company value up to $74.34 billion, approximately $16 billion more than what Ellison's third and latest offer would approximately amount to. With that, it seems WBD is looking to sell with a price in the $70 billion range.
WBD's potential price increase is similar to the price hike that Disney faced when it purchased 20th Century Fox in 2019. Disney had initially planned to pay $52 billion for the company, but after Comcast entered the fray as a potential buyer, Fox's price went up. This led to Disney closing the deal at $71 billion.
Who will end up acquiring Warner Bros. Discovery is an important indicator for the ultimate fate of the media giant. Paramount is said to be interested in the whole company, while Netflix and Comcast are said to be aiming for WBD's film, television and streaming assets.