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Skydance-owned Paramount has extended its tender offer window in the high-stakes battle to acquire Warner Bros. Discovery, giving shareholders until February 20 to accept its $30 per share cash offer. This marks the second extension since Paramount launched its hostile takeover bid last month, challenging Warner’s existing merger agreement with Netflix.
The offer, valued at $77.9 billion with a total enterprise value exceeding $108 billion including debt, has attracted tenders of approximately 168.5 million Warner shares as of Wednesday. However, this represents less than 7% of Warner’s outstanding series A common stock, far below the 50% threshold Paramount would need to gain control of the media giant.
Warner Bros. Discovery dismissed Paramount’s latest move, stating that “Paramount continues to make the same offer our Board has repeatedly and unanimously rejected in favor of a superior merger agreement with Netflix.” A company spokesperson emphasized that more than 93% of shareholders have thus far rejected what they described as “Paramount’s inferior scheme.”
The competing Netflix deal, announced in December, proposes a $72 billion all-cash acquisition of Warner’s studio and streaming business. Including debt, Netflix’s offer carries an enterprise value of approximately $83 billion, or $27.75 per share. The companies recently converted the transaction to an all-cash structure, which they claim simplifies the deal and accelerates the path to a shareholder vote expected by April.
Paramount, however, insists its offer provides greater value and has accused Warner’s leadership of lacking transparency with stockholders. In a statement Thursday, Paramount alleged Warner’s board was “rushing to solicit shareholder approval” for the Netflix merger, warning this could potentially result in lower shareholder payouts if debt from Warner’s previously-announced networks business spinoff transfers to the studio and streaming operations.
The battle has intensified as Paramount escalates its hostile bid with a proxy fight. The company recently announced plans to nominate its own slate of directors to Warner’s board before the next shareholder meeting and on Thursday filed preliminary materials to solicit proxies opposing the Netflix merger.
Complicating the valuation comparison is the fundamental difference in what each bidder seeks to acquire. Netflix is pursuing only Warner’s studio and streaming business, including its legacy TV and movie production assets and platforms like HBO Max. In contrast, Paramount’s bid targets the entire company, encompassing Warner’s news and cable operations, which would place CNN and CBS under common ownership.
Under Netflix’s proposal, Warner’s current networks would be spun off into a separate company called Discovery Global, following a previously-announced separation plan.
Industry analysts note that regardless of which bidder prevails, any acquisition of Warner Bros. Discovery faces a potentially lengthy regulatory review process with significant antitrust scrutiny. The political landscape under President Donald Trump adds another layer of complexity, given his unprecedented suggestions about potential personal involvement in merger approval decisions.
The high-stakes media industry consolidation battle reflects broader trends of streamlining content production and distribution as traditional media companies navigate the challenges of the streaming era. For Warner Bros. Discovery, formed through the 2022 merger of WarnerMedia and Discovery, this potential sale comes amid ongoing efforts to reduce debt and achieve operational efficiencies.
Market reaction remained muted following the announcement, with shares of Warner Bros. Discovery and Netflix both experiencing slight declines on Thursday, while Paramount-Skydance shares rose nearly 3%.
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8 Comments
It’s interesting to see the back-and-forth between Paramount and Warner Bros. Discovery over this acquisition. I wonder what the strategic rationale is behind Paramount’s bid, and whether they think they can create more value than the Netflix deal on the table.
Paramount must really believe they can unlock more value from Warner Bros. Discovery than the Netflix deal, to be so persistent with this hostile takeover attempt. I’ll be curious to see how the shareholders ultimately respond.
Interesting move by Paramount to extend the tender offer deadline again. I wonder if they’re hoping for more shareholders to come on board, or if this is a negotiating tactic. Either way, it’s a high-stakes battle for control of the media giant Warner Bros. Discovery.
This is a complex situation with a lot at stake. I can understand the appeal for Paramount to try and acquire a major media player like Warner Bros. Discovery, but it seems they have an uphill battle to win over shareholders at the moment.
You’re right, the Netflix deal appears to have more shareholder support at this stage. Paramount will need to come up with a very compelling strategic vision to convince investors to reject that and go with their offer instead.
The extension of Paramount’s tender offer deadline signals they are determined to pursue this acquisition, despite the resistance from Warner Bros. Discovery. It will be interesting to see if they can sway more shareholders before the February 20th deadline.
This seems like a pretty aggressive move by Paramount to try and acquire Warner Bros. Discovery, especially given the existing merger agreement with Netflix. I’m curious to see how this all plays out and if Paramount can gain enough shareholder support to take control.
You raise a good point. The Netflix deal does seem to have more shareholder support at the moment. Paramount will need to sweeten their offer or find some other way to convince investors if they want to derail that merger.