Paramount Skydance today reaffirmed its $30 a share all cash offer for Warner Bros. Discovery, declining to raise its bid.
The company led by David Ellison said it “notes [WBD’s] decision not to engage on Paramount’s fully financed all-cash offer to acquire all of WBD” but called its offer superior to Warner’s current deal with Netflix and insisted its financing is sound and that it has been receptive to all WBD’s concerns.
“Throughout this process, Paramount has diligently and constructively addressed each concern raised by WBD. As detailed in Paramount’s December 22 amended proposal and subsequent filings, Paramount cured every issue raised by WBD on December 17, most notably by providing an irrevocable personal guarantee by Larry Ellison for the equity portion of the financing. Nevertheless, WBD continues to raise issues in Paramount’s offer that we have already addressed, including flexibility in interim operations,” Paramount said in a statement.
On Wednesday, the Warner Bros. Discovery board advised shareholders to reject an amended takeover offer from Paramount, calling the bid “inferior” to its signed deal with the giant streamer.
Netflix is buying the Warner Bros. Studios and streaming assets for about $27.75 a share in cash and stock.
Both transactions would require regulatory approval and both could take up to 18 months to close. In the case of Netflix, WBD would move ahead with a planned spinoff of its linear television business into a separate public company called Discovery Global in the third quarter of 2026.
WBD said it believes Paramount’s takeover offer carries higher risks and uncertainties.
Paramount disputed that, insisting it has a better chance at regulatory approval. It cited both a recent dip in Netflix shares as well as the wobbly start of trading this week for Comcast’s cable spinoff Versant. The the WBD board “has not disclosed any analysis to help its shareholders value their potential ongoing ownership of the linear company,” Par said. The amount of debt WBD ultimately allocates to a standalone Discovery Global will be key and could shift the final price, Paramount suggested, “as we have interpreted the agreement.”
“We encourage WBD shareholders to ask the Board of WBD for transparency on this aspect of the deal with Netflix.”
Paramount also defended its debt financing with Bank of America, Citibank and Apollo, “each global sophisticated financial institutions, with decades of experience financing companies and borrowers in history’s largest, most complicated transactions. They have confirmed that the commitment letter previously delivered by them to provide the previously disclosed $54 billion of debt financing.”
Paramount is a much smaller company than WBD, which expressed concern at the large amount of debt Paramount is tapping to finance the deal. Par said it “would welcome the opportunity to engage directly with the WBD Board to discuss the offer and address the Board’s latest claims.”
Oracle co-founder Larry Ellison, David Ellison’s father and one of the world’s richest people, has agreed to personally backstop the equity portion of the deal.
“Paramount’s offer is superior to WBD’s existing agreement with Netflix and represents the best path forward for WBD shareholders. $30.00 per share in cash is easy to value. Netflix’s transaction, on the other hand, contains multiple uncertain components and has already decreased in total value. When announced in December, the Netflix transaction offered WBD shareholders $23.25 in cash, $4.50 in Netflix stock and a share in the pending spin-off of Discovery Global. Today, Netflix’s stock price is trading well beneath the low end of its collar, reducing the value offered to WBD shareholders.
“In addition, while the WBD Board has not disclosed any analysis to help its shareholders value their potential ongoing ownership of the linear stub, Versant Media, its closest comparable, debuted shares this week and its performance to date illustrates the challenged path ahead for Discovery Global. Paramount’s analysis (detailed below) shows the total value of the Netflix transaction to WBD shareholders today is $27.42 – unmistakably inferior to Paramount’s $30.00 in cash.
“Our offer clearly provides WBD investors greater value and a more certain, expedited path to completion. Throughout this process, we have worked hard for WBD shareholders and remain committed to engaging with them on the merits of our superior bid and advancing our ongoing regulatory review process,” David Ellison said.
Paramount has taken a tender offer directly to WBD shareholders in an attempt to derail the Netflix agreement. Stockholders have until Jan. 21 to tender their shares to Paramount.
