Paramount Skydance Asserts Warner Bros. Discovery Offer Tops Netflix Deal

Paramount Skydance, led by CEO David Ellison, is attempting to convince Warner Bros. Discovery (WBD) shareholders of the merits of its ongoing $30 per share acquisition bid. WBD’s board recently rejected this fully financed cash offer during a meeting, proposing instead a significant $83 billion sale to Netflix.

Paramount’s Position on the Acquisition

In a statement following the rejection, Paramount emphasized that it has thoroughly addressed each concern brought forth by WBD. Paramount maintains that its offer provides superior value for WBD investors compared to the Netflix deal.

• Paramount’s offer: $30 per share in cash.
• Key date of rejection: Wednesday before the announcement.
• WBD’s alternative: $83 billion sale to Netflix.

According to Paramount, its December 22 amended proposal included an irrevocable personal guarantee from Larry Ellison. This guarantees the equity financing portion of the offer. Despite attempts to pacify WBD’s board, discussions regarding flexibility in interim operations are ongoing.

Concerns Over Netflix Deal

Paramount believes the Netflix deal is less favorable for shareholders due to its uncertain components. Initially valued at $23.25 in cash and $4.50 in Netflix stock, the proposal has decreased due to Netflix’s plunging stock price. Currently, the real value is estimated at $27.42 per share.

• Netflix deal components:
• $23.25 in cash
• $4.50 in Netflix stock
• Share in pending Discovery Global spin-off

All parties involved are fully aware that WBD plans to spin off Discovery Global, which will include channels like CNN and HGTV, by the third quarter of 2026. However, Paramount warns that shares in the spin-off may hold little to no value.

Analyst Perspectives

Industry analysts, like Laurent Yoon from Bernstein & Co., note that a modest increase in Paramount’s bid could trigger further negotiation rounds. The financial stability and cash flow of Netflix offer a formidable challenge for Paramount, even with Larry Ellison’s vast resources.

In conclusion, the battle for Warner Bros. Discovery continues as Paramount Skydance pursues a deal that they argue holds more value for shareholders compared to Netflix’s lesser offer.