Last week, we learned that Netflix and Warner Bros. Discovery have agreed to an acquisition that will cost the streaming platform a whopping $72 billion (with an enterprise value of $82.7 billion).
Paramount Skydance was eager to add Warner Bros. to its portfolio, and David Ellison isn't taking this loss lying down.
The company has announced plans to launch a hostile bid for Warner Bros. with an all-cash tender offer to acquire all outstanding shares of WBD for $30 per share. The difference is that Paramount is looking to scoop up the company's TV business, including CNN, TBS, and TNT. Netflix is only after Warner Bros. Pictures and HBO.
This all-cash offer equates to an enterprise value of $108.4 billion, and Paramount believes this is a much better deal for shareholders.
"Paramount’s strategically and financially compelling offer to WBD shareholders provides a superior alternative to the Netflix transaction," the company said today, "which offers inferior and uncertain value and exposes WBD shareholders to a protracted multi-jurisdictional regulatory clearance process with an uncertain outcome, along with a complex and volatile mix of equity and cash."
Paramount's $30/share offer is backed by Oracle co-founder Larry Ellison, David Ellison's father, and RedBird Capital Partners.
David Ellison has issued the following statement today:
"WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company. Our public offer, which is on the same terms we provided to the Warner Bros. Discovery Board of Directors in private, provides superior value, and a more certain and quicker path to completion."
"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. We are taking our offer directly to shareholders to give them the opportunity to act in their own best interests and maximize the value of their shares."
Yesterday evening, President Donald Trump expressed concerns about Netflix's plans to buy Warner Bros. Discovery's movie studios and cable/streaming platforms.
Acknowledging that Netflix has a "big market share" and the firms' combined size "could be a problem," the Commander-in-Chief later said that the streaming service already has a "very big market share," which would "go up by a lot" if the deal is made.
Trump also confirmed that Netflix co-CEO Ted Sarandos recently visited the White House. "I have a lot of respect for him. He's a great person. He's done one of the greatest jobs in the history of movies," he said, later adding that he will be directly involved with the regulatory process.
As a reminder, it's been reported that the Ellisons are close friends with the President. However, Trump has just taken to social media to declare that the Ellison-owned Paramount is "no better than the old ownership," as he lashed out at the company over a 60 Minutes interview with new nemesis Rep. Marjorie Taylor Greene.
Stay tuned for updates as we have them.