Last week, Netflix announced its acquisition of Warner Bros. Discovery (WBD) for $827 billion.Film and streaming assets (That is, excluding Discovery Channel and other content), this Hollywood blockbuster marriage immediately encountered a "dark horse." Paramount, dissatisfied with the Warner Bros. Discovery board's decision, officially launched its attack.Hostile takeoverThey bypassed the board of directors and made an all-cash takeover offer of up to $1084 billion to Warner Bros. Discovery shareholders.
A $30 all-cash deal versus a $27.75 mixed deal: Paramount wants to "take the whole pot".
派拉蒙提出的最新報價為每股30美元全現金，該要約將於1月8日到期。相較之下，華納兄弟探索董事會上週一致通過的Netflix報價為每股27.75美元 (其中包含每股以23.25美元現金與價值4.5美元的股票計算)。
Besides the differences in price and payment method, the disagreement between the two parties regarding the scope of the acquisition was even more crucial:
• Netflix: Only wants to acquire the "essence" of Warner Bros. Discovery's assets after its expected spin-off in 2026, namely streaming (HBO Max) and studio businesses (Warner Bros. Pictures, television, and games), excluding traditional cable television (i.e., Discovery Channel and other content).
• Paramount: Intends to acquire the entire Warner Bros. Discovery, including its declining but still sizable traditional cable television channel (Global Networks).
Warner Bros. is criticized for exploring an "illusory" valuation of its board of directors, raising questions about whether it has fulfilled its duty to maximize shareholder interests.
Paramount launched a fierce attack in its statement, accusing Warner Bros. Discovery's board of directors of recommending the Netflix deal based on an "illusory" future valuation of the spun-off cable company (Discovery Global) and ignoring the risk that the business would be assigned a large amount of debt.
Paramount revealed that despite submitting six proposals in the past 12 weeks, Warner Bros. Exploration has never engaged in meaningful discussions. Paramount questions whether Warner Bros. Exploration's management seems to be overly biased towards Netflix's offer, and therefore decided to directly appeal to shareholders, emphasizing that its all-cash proposal is a "clearly superior alternative."
In terms of funding, Paramount, which was just acquired by Skydance Media for $80 billion this year, is backed by the family of Oracle co-founder Larry Ellison and the US investment management company RedBird Capital Partners, and has received a total of $540 billion in debt financing commitments from banks including Bank of America, Citigroup and Apollo (Yahoo's parent company).
Using Trump as a backer? Paramount: We face less regulatory risk.
Beyond the financial battle, this acquisition war also involves political and regulatory maneuvering. Paramount executives argue that compared to the massive streaming market share that a merger with Netflix would result in, the collaboration between Paramount and Warner Bros. would face less regulatory hurdle.
This seems to have been endorsed by US President Donald Trump."Assist"Trump recently commented publicly on the Netflix acquisition, stating that it could be a problem. Paramount appears to be trying to leverage its relatively smaller size and relationship with the new administration to persuade shareholders to accept this seemingly lower-risk, more cash-rich deal.
