Though the deal isn't quite officially official (there are still a few things to iron out), it looks like Netflix will ultimately claim ownership of Warner Bros. Discovery after the company accepted the streaming giant's $82.7 billion offer this week.
Paramount Skydance was not happy (to say the least) about this development, and CEO David Ellison is determined not to go down without a fight... even if it's one he has little to no chance of winning.
Paramount has already submitted a hostile bid worth $108.4 billion.
"Look, we're sitting on Wall Street, where cash is still king," Ellison told CNBC. "We are offering shareholders $17.6 billion dollars more cash than the deal they currently have signed up with Netflix. And we believe, when they see what is currently in our offer, that that's what they'll vote for."
Zaslav has ten business days from the date the bid was submitted to turn down Netflix's offer and weigh-up other options, and Ellison has now gone straight to WBD's board of directors with a seventh offer, this time worth $30 per share.
“Our public offer — identical to the terms we presented to WBD privately — delivers superior value and a faster, more certain path to completion than the transaction announced with Netflix. IT IS NOT TOO LATE TO REALIZE THE BENEFITS OF PARAMOUNT’S PROPOSAL IF YOU CHOOSE TO ACT NOW AND TENDER YOUR SHARES.”
“Our offer is financially superior to Netflix’s transaction, which provides WBD shareholders with lower value, less cash and significantly less certainty. On its face, Netflix is offering WBD shareholders $23.25 per share in cash, $4.50 in stock and a share in WBD’s Global Networks spin-off,” the letter continues. “In reality, however, the total value is materially lower than advertised.”
Ellison then pretty much put Zaslav on blast.
“To suggest that we are not “good for the money” (or might commit fraud to try to escape our obligations), as certain reports have speculated, is absurd. That absurdity is underscored by the fact that WBD and its advisors never picked up the phone or typed out a responsive text or email to raise any question or concern or to seek any clarification about either the trust or our equity commitment papers.”
A lot of people within the industry (and in general, really) feel that Ellison is just embarrassing himself at this stage, but he is right about one thing: more money is more money, and cash is king at the end of the day.
Is there a chance WBD's shareholders will decide to take him up on this offer? We'll just have to wait and see how things play out.
In related news, an HBO Max subscriber has filed a class-action lawsuit over Netflix’s proposed acquisition.
According to the LA Times, Michelle Fendelander alleged that if Netflix’s deal were to go through, it would decrease competition in the subscription streaming market. The lawsuit asks the court to issue an injunction to prevent the merger from happening.
“American consumers — including SVOD purchasers like Plaintiff, an HBO Max subscriber — will bear the brunt of this decreased competition, paying increased prices and receiving degraded and diminished services for their money,” Fendelander’s lawsuit claims. “The elimination of this rivalry is likely to reduce overall content output, diminish the diversity and quality of available content, and narrow the spectrum of creative voices appearing on major streaming platforms.”
Netflix responded with:: “We believe this suit is meritless and is merely an attempt by the plaintiffs’ bar to leverage all the attention on the deal.”