In a major development shaking the global media landscape, Warner Bros. Discovery Inc. is preparing to formally turn down a massive hostile takeover bid from Paramount Skydance Corp. valued at a staggering $108.4 billion. This decision, reported by Bloomberg and Reuters citing insiders, marks a critical juncture in the fierce battle for control of the iconic Hollywood studio.
Boardroom Deliberations Favour Netflix
The board of Warner Bros. Discovery, after careful review, is expected to reject the unsolicited offer from Paramount Skydance as early as Wednesday, July 10th. Reports indicate the board may also advise its shareholders to vote against the proposed acquisition. The primary concerns revolve around the financing structure and other terms of the Paramount deal.
According to sources, the board maintains its view that an earlier offer from streaming giant Netflix presents a more favourable alternative for the company. Netflix was the first to table a bid to acquire Warner Bros. Discovery earlier this month, which Paramount Skydance later attempted to top with its larger, all-cash proposal.
The Warner Bros. board is likely to file its official response to Paramount's tender offer by the Wednesday deadline. Should the rejection proceed as anticipated, Netflix would retain its path to acquire Warner Bros. Discovery, granting it access to the studio's legendary film and TV production arm and its vast, valuable content library.
The Stakes in the Streaming Wars
The contest to acquire Warner Bros. Discovery is particularly significant, as the victor will secure a media crown jewel. The prize includes a portfolio featuring timeless classics like "Casablanca" and "Citizen Kane," modern blockbuster franchises such as "Harry Potter," beloved TV series like "Friends," the premium HBO network, and the HBO Max streaming service.
This acquisition is seen as a game-changer in the intensifying streaming wars. The winner, whether Netflix or Paramount Skydance, would gain a monumental content treasure trove and a decisive competitive edge. Netflix initially emerged with a victorious $27 per share cash-and-stock bid for Warner Bros.' non-cable assets.
Not to be outdone, Paramount Skydance CEO David Ellison took a direct approach, presenting a $30 per share all-cash bid directly to Warner Bros. shareholders for the entire company. Paramount has defended its offer as superior, claiming in regulatory filings that it would face a smoother path to obtaining necessary regulatory approvals.
Kushner's Exit and Financing Shifts
In a related twist, Jared Kushner’s Affinity Partners has exited the Paramount consortium financing the bid for Warner Bros. Discovery. The involvement of Donald Trump's son-in-law had attracted significant and unwelcome scrutiny, especially given the former president's comments about personally reviewing such a deal.
With Affinity's departure, the revised $108.4 billion Paramount bid is now backed by $41 billion in new equity from the Ellison family and RedBird Capital, along with $54 billion in debt commitments from financial heavyweights Bank of America, Citi, and Apollo Global Management.
The coming days are crucial as the Warner Bros. Discovery board's anticipated rejection sets the stage for the next chapter in this high-stakes corporate drama, potentially cementing Netflix's position as the future owner of one of Hollywood's most storied studios.
