Paramount Skydance’s surprise hostile takeover offer for Warner Bros. Discovery on Monday has put Los Gatos-based Netflix’ blockbuster bid to acquire the Hollywood behemoth in doubt, according to the AP, Reuters and the Los Angeles Times.
Its path to becoming Hollywood’s next dominant studio is now in question.
Paramount, which is backed by the Ellison family and RedBird Capital, has put forward a $30-per-share proposal and urged Warner’s shareholders to reject the Netflix agreement announced Friday.
Paramount argues its offer is cleaner and safer for shareholders than Netflix’s cash-and-stock package.
It seems tailor-made to appeal to regulators: The company says its bid delivers roughly $18 billion more in immediate cash value to Warner shareholders and is less likely to trigger antitrust scrutiny.
Paramount also said its deal would be backstopped by Ellison family capital and $54 billion in debt.
Netflix, which last Friday agreed to acquire WB’s studio and HBO Max after the company splits parts of its business.
What had been billed as a transformational purchase on the other side of the weekend (because it would fold HBO Max and Warner’s film and TV libraries into Netflix’s global streaming engine) could be delayed.
Now, shareholders or regulators might favor Paramount’s cash offer or raise objections to the Netflix transaction.
Warner’s board has so far negotiated with Netflix, and the next steps will likely include shareholder consideration of Paramount’s tender offer and renewed scrutiny from antitrust authorities.
