Warner Bros. Discovery’s board is on the verge of turning down Paramount Skydance’s revised takeover bid, as David Ellison continues to pursue the assets he believes are essential for creating a dominant force in 21st-century Hollywood.
According to Bloomberg News, the WBD board is expected to reject the amended offer put forth by Paramount Skydance on December 22. Warner Bros. Discovery has already entered into a merger agreement with Netflix, valued at over $80 billion.
Despite this, Paramount Skydance is not giving up and is making a tender offer to WBD shareholders. The ongoing battle between the two companies has seen WBD’s shares surge by more than 170% this year. However, prior to this, shares had been trading below $10 for most of 2024. The WBD board is set to convene next week to officially vote on how to respond to Paramount’s latest proposal.
The decision by the WBD board comes as no surprise, as there have been no indications of a significant shift in their preference for either Paramount or Netflix as the ideal partner for Warner Bros. and HBO Max. There is much speculation within the industry about whether Paramount is willing to further increase the financial value of its bid, currently standing at $30 per share.
Paramount’s recent amended offer focused on addressing concerns about the financing of the all-cash transaction. Larry Ellison, the father of David Ellison and a software billionaire, took steps to alleviate these concerns by providing an “irrevocable personal guarantee of $40.4 billion” towards Paramount’s $108 billion all-cash offer for WBD. This offer includes CNN, TNT, and other cable channels that are set to be spun off into a separate entity next year.
In addition to the financing aspect, Paramount also raised the breakup fee to match Netflix’s figure of $5.8 billion, payable to WBD if the deal fails to pass regulatory scrutiny. Netflix’s deal, valued at nearly $83 billion, is a combination of cash and stock.
Should Paramount decide to increase its offer following the expected rejection by the WBD board, the spotlight will shift to Netflix. It remains unclear whether Netflix is willing to up the ante in response.
Overall, the battle for Warner Bros. Discovery’s future continues to unfold, with both Paramount Skydance and Netflix vying for the opportunity to shape the entertainment landscape in the years to come.
