Paramount Skydance is launching a hostile bid to purchase Warner Bros. Discovery after it misplaced out to Netflix in a monthslong bidding battle for the legacy belongings, the corporate mentioned Monday.
Paramount will go straight to WBD shareholders with an all-cash, $30 per share provide. That is the identical bid WBD rejected final week and equates to an enterprise worth of $108.4 billion.
The provide is backstopped with fairness financing from the Ellison household and the non-public fairness agency RedBird Capital in addition to $54 billion in debt commitments from Financial institution of America, Citi and Apollo World Administration, Paramount mentioned in a information launch.
A portion of the fairness financing comes from exterior Center Jap financing companions together with Saudi Arabia’s Public Funding Fund, Abu Dhabi’s L’imad Holding Firm PJSC, and the Qatar Funding Authority. One other portion derives from Jared Kushner’s Affinity Companions. Kushner is U.S. President Donald Trump‘s son-in-law.
These companions have agreed to “forgo any governance rights,” together with board seats, as a part of their non-voting fairness funding, in keeping with a Paramount submitting. The modifications permit the deal to be exterior of the jurisdiction of the Committee on Overseas Funding within the U.S., or CFIUS.
Shares of Paramount had been 7% increased in morning buying and selling Monday. Warner Bros. Discovery’s shares had been up about 5% whereas Netflix was down greater than 4%.
“We’re actually right here to complete what we began,” Paramount Skydance CEO David Ellison advised CNBC’s “Squawk on the Road” on Monday. “We put the corporate in play.”
Paramount Skydance started its hunt for Warner Bros. Discovery in September, submitting three bids earlier than WBD launched a formal sale course of that finally introduced in different suitors.
On Friday, Netflix introduced a deal to accumulate WBD’s studio and streaming belongings for a mixture of money and inventory, valued at $27.75 per WBD share, or $72 billion. Paramount had been bidding for the whole thing of Warner Bros. Discovery, together with these belongings and the corporate’s TV networks like CNN and TNT Sports activities.
“We’re sitting on Wall Road, the place money remains to be king. We’re providing shareholders $17.6 billion additional cash than the deal they at the moment have signed up with Netflix, and we imagine after they see what it’s at the moment in our provide that that is what they will vote for,” Ellison mentioned.
Ellison mentioned Monday he locations a price of $1 per share on the linear cable belongings, that are set to commerce as a separate public entity referred to as Discovery World in mid-2026. WBD executives have privately valued the belongings nearer to $3 per share.
Paramount has repeatedly argued to the WBD board of administrators that holding Warner Bros. Discovery complete is in one of the best curiosity of its shareholders.
Paramount made a bid on Dec. 1 and heard again from WBD that it wanted to make sure alterations to the provide, Ellison mentioned Monday. When Paramount made the modifications and upped its bid to $30 per share, Ellison by no means heard again from WBD CEO David Zaslav, he mentioned.
Ellison mentioned he advised Zaslav by way of textual content message that $30 per share wasn’t the corporate’s greatest and last provide, suggesting the corporate is keen to bid increased nonetheless.
Ellison argued Paramount’s deal can have a shorter regulatory approval course of given the corporate’s smaller dimension and pleasant relationship with the Trump administration. He referred to as Trump a believer “in competitors” and mentioned Paramount’s mixture with WBD might be “an actual competitor to Netflix, an actual competitor to Amazon.”
Ellison additionally threw chilly water on Netflix’s possibilities of regulatory approval.
“Permitting the No. 1 streaming service to mix with the No. 3 streaming service is anticompetitive,” Ellison mentioned.
CNBC reported Friday that the Trump administration was viewing the cope with “heavy skepticism,” and Trump mentioned Sunday that the market share issues might pose a “drawback.”
Netflix agreed to pay Warner Bros. Discovery $5.8 billion if the deal shouldn’t be permitted, in keeping with a Securities and Trade Fee submitting Friday. Warner Bros. Discovery mentioned it could pay a $2.8 billion breakup payment if it decides to name off the deal to pursue a special merger.
Netflix, for its half, as soon as once more championed the deal as optimistic for shareholders, customers and the media business as an entire when its prime management spoke on the UBS World Media and Communications Convention on Monday.
Co-CEO Greg Peters mentioned they acknowledge the Netflix deal got here as a shock however referred to as the Warner Bros. studio and HBO Max content material complementary to Netflix’s enterprise.
Co-CEO Ted Sarandos mentioned the acquisition would shield jobs at a time when layoffs have been rampant throughout media: “Within the provide that Paramount was speaking about right this moment, additionally they had been speaking about $6 billion of synergies. The place do you assume synergies come from? Reducing jobs. So we’re not slicing jobs, we’re making jobs.”
— CNBC’s Lillian Rizzo contributed to this report.
