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Paramount Counters with $108 Billion Bid to Rival Netflix for Warner Bros Acquisition
On Monday, Paramount made a bold move in the race to buy Warner Bros. Discovery (WBD) by launching a hostile bid worth $108.4 billion. This comes just days after Warner Bros. had agreed to be acquired by Netflix for $82.7 billion. Paramount is going directly to WBD’s shareholders with an all-cash offer of $30 per share, which is $18 billion more cash than Netflix’s deal. Netflix’s offer combined $23.25 in cash with $4.50 in Netflix shares, totaling $27.75 per share.
What makes Paramount’s offer stand out is that it’s for the entire Warner Bros. Discovery company. On the other hand, Netflix’s $82.7 billion deal only covers Warner’s Hollywood studios and streaming business, not the whole company.
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Interestingly, CNBC reported that these same terms were actually turned down by WBD’s board just a week ago. Paramount’s CEO David Ellison said he believes the WBD board is pushing a worse deal, one that mixes cash and stock, brings uncertainty about the future of the linear cable business, and faces regulatory challenges.
Backing Paramount’s $108 billion bid is serious money. Equity financing comes from the Ellison family and the private equity firm RedBird Capital, plus $54 billion in debt commitments shared between Bank of America, Citi, and Apollo.
Netflix had appeared to take the lead last Friday, winning a bidding war against Paramount and Comcast. But Paramount’s aggressive $108 billion offer keeps the fight alive, dragging out what’s already been a long battle to own one of Hollywood’s biggest names.
Netflix’s deal has stirred antitrust debates because it would combine two giant streaming platforms, raising concerns about competition. Former President Donald Trump even mentioned it could be a problem due to how much market share the merged companies would have. A Warner Bros. deal with Paramount would face similar scrutiny.
There are also some financial safety nets in place: Netflix agreed to pay WBD $5.8 billion if the deal falls through. Meanwhile, WBD must pay Netflix $2.8 billion if they decide to back out.
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As of now, Netflix hasn’t made any comment on Paramount’s $108 billion bid to rival them for Warner Bros. acquisition.
This back-and-forth shows just how intense and high-stakes the race is, with Paramount countering rival Netflix for Warner Bros acquisition in a big way and refusing to back down easily.
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