Warner Bros. Discovery: 93% Shareholders Oppose Paramount’s Proposed Scheme
Warner Bros. Discovery (WBD) has officially countered the $30 per share hostile takeover proposal from Paramount Skydance, announcing that over 93% of its shareholders oppose the offer. This announcement follows Paramount’s decision to extend its takeover bid until February 20, 2023. Paramount is urging WBD shareholders to vote against the previously negotiated $83 billion acquisition by Netflix, which is poised to significantly reshape the entertainment landscape.
Shareholder Rejection of Paramount’s Offer
WBD reaffirmed that its board had consistently rejected Paramount’s proposal, stating it was inferior compared to the Netflix deal. The board has dismissed similar offers multiple times, emphasizing their commitment to completing a merger with Netflix.
- 93% of WBD shareholders oppose Paramount’s acquisition offer.
- WBD’s board has rejected Paramount’s bids eight times.
Implications of Paramount’s Bid
If Paramount Skydance fails to gain the required shareholder support, it may need to determine a new strategy or extend its offer deadline yet again. Analysts believe that simply increasing the offer price may not be sufficient to sway investors.
| Offer Details | Paramount Skydance | Netflix |
|---|---|---|
| Proposed Share Price | $30/share | $27.75/share |
| Enterprise Value | $108.4 billion | $82.7 billion |
Backing for Paramount’s Proposal
Paramount’s acquisition attempts are supported by notable financial backers, including Oracle co-founder Larry Ellison and several sovereign wealth funds. However, current communications indicate they are unwilling to increase their bid beyond $30 per share.
Regulatory and Financial Considerations
Recent updates reveal that Netflix has adjusted its offer to fully cash, enhancing its appeal. This strategy aims to address concerns that have arisen regarding cash flow and company valuations.
- Netflix upgraded its offer to fully cash, valued at $27.75/share.
- The acquisition deal is expected to finalize between 12-18 months, contingent on regulatory approval.
Financial Projections for Discovery Global
Warner Bros. Discovery has disclosed intricate financial projections for its Discovery Global unit, providing clarity against Paramount’s claims. The board indicated Discovery Global has a projected value range significantly different than what Paramount has presented.
As the battle between Paramount and WBD continues, the next steps will depend on shareholder response and further negotiations, setting the stage for a pivotal moment in the media industry.
