Paramount Skydance does not lower his hands and continues with one goal in mind: to acquire Warner Bros. Discovery and derail the agreement with Netflix.
Last Friday, December 5, Netflix and Warner Bros. Discovery revealed that Ted Sarandos' streaming service had won the bid for WBD, beating the other bidders, Paramount and Comcast, in a $72 billion deal (with a total enterprise value of $82.7 billion)through which, Netflix would buy the studio operations Warner Bros., HBO and HBO Max.
But David Ellison from Paramount Skydance, is not giving up.
A few moments ago, the studio owned by Ellison, announced the start of a takeover bid (OPA) in cash to acquire all outstanding shares of WBD a $30 per sharethe same conditions offered in the December 4 offer presented to the board of directors of Warner Bros. Discovery.
The Paramount proposed transaction covers the entirety of Warner Bros. Discoveryincluding film and television studios, Warner Bros., HBO, el streamer HBO Maxas well as the division of global television networks, Discovery Global which is made up of TNT, CNN, TBS, CNN, HGTV, Food Network, among other networks.
The big difference in this instance is thatParamount is taking its offer directly to WBD shareholders.
“OUR PROPOSAL IS SUPERIOR TO NETFLIX IN ALL DIMENSIONS,” says the CEO of Paramount Skydance.
According to Paramount, Its all-cash offer is equivalent to an enterprise value of $108.4 billion. (including assumption of debt) with a equity value of $77.9 billion dollars.
For more context, the Netflix proposal involves a volatile and complex structure, valued at $27.75 per share (against Paramount's $30 per share), in a combination of cash ($23.25) and stock ($4.50), subject to hedging and future performance of Netflix, equivalent to an enterprise value of $82.7 billion (excluding the television business, Discovery Global).
Paramount's offer for all of WBD to its shareholders is $18 billion dollars higher than Netflix's proposal.
Furthermore, Paramount stated that its takeover bid for WBD would close within 12 months, compared to the 12-18 months expected by Netflix to complete your agreement.
“Our proposal is superior to Netflix in all dimensions,” Paramount Skydance CEO David Ellison said in a Monday morning call with analysts and investors.
WBD is required by law to inform shareholders within 10 business days whether to accept or reject Paramount Skydance's offer of $30 per share. Paramount's takeover bid, unanimously approved by its board of directors, expires at 5:00 p.m. ET on January 8, 2026unless extended.
THE PARAMOUNT OFFER IN DETAIL
Paramount's $30 per share offer is backed by $40.7 billion of equity from the co-founder of Oracle, Larry Ellisonfather of David Ellison, and RedBird Capital Partnersand financing of sovereign wealth funds Saudi Arabia, Qatar y Abu Dhabias well as Affinity Partnersthe investment company founded by Jared Kushner, Donald Trump's son-in-law, according to a document filed by the company.
Paramount also said its bid for WBD will be financed in part with $54 billion in debt commitments from Bank of America, Citi and Apollo Global Management.
Both Larry Ellison and RedBird Capital Partners provided the money for Skydance Media's $8 billion acquisition of Paramount Global, which was completed last August, giving way to the Paramount Skydance merger.
In the announcement of the study, light was shed on the possible reason why WBD did not accept his proposal and favored the streamer'swith Paramount stating that, WBD's board of directors' recommendation of the transaction with Netflix instead of Paramount's offer is based “on an illusory forward-looking valuation” of the WBD television network, to be called Discovery Global, which is “not supported by business fundamentals and is burdened by a high level of financial leverage assigned to the entity.”
Paramount believes Discovery Global should be valued at $1 per share, while WBD estimates the television company is worth between $3 and $4 per share.
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Compared to the Netflix deal, Paramount stated that his proposal to buy Warner Bros. Discovery would not only benefit WBD investorssino also to the Hollywood film industry.
“We are focused on expanding creative production, not on dominating the sector, as Netflix envisions. Our goal is to strengthen Hollywood in a way that benefits the entire ecosystem”the company assured.
This same Monday, Paramount committed to releasing more than 30 films in theaters if WBD winsand clear blow to Netflixwhich has historically shown apathy towards theatrical distribution. In announcing its deal with WB, Netflix said it would honor Warner Bros.' current commitments to theatrical releases, and Ted Sarandos noted that the streaming platform releases dozens of its films in theaters. However, it is important to note that these film premieres that Sarandos refers to, are limited releases in select US theaters for some of their highest profile projectsin order to be eligible for industry awards. The Oscar in particular has a cinema release requirement to qualify for a nomination.
At the beginning of this year, Sarandos called the movie experience “outdated,” and indicated that “Over time, distribution windows will evolve to be much more accessible to the consumer.”, to be able to reach the audience where they are more quickly”.
The above meansdistribution windows with less waiting time between its theatrical release and its arrival on streaming, in other words, ephemeral mode for film premieressomething that would irrevocably harm the theater, distribution and display business.
Another highlight addressed by Ellison on the investor call was the streaming business. If a purchase is made, Paramount+ and HBO Max combined would have approximately 200 million global subscribersputting them “at the Disney level“, according to Ellison. As a comparison, Netflix and HBO Max together would exceed 400 million global subscribers, “So, again, really We consider our agreement to be completely pro-competitive. Promotes creative and consumer talentunlike the combination [de WB] with Netflix, which would give them a scale that would be detrimental to Hollywood and the consumer, and is anti-competitive by any standards“said the CEO.
Ellison added:
“WBD shareholders deserve the opportunity to consider our excellent all-cash offer for their company-wide shares. Our tender offer, which is on the same terms that we presented to the Warner Bros. Discovery Board of Directors privately, offers superior value and a safer, faster closing process. We believe that the WBD Board of Directors is seeking an inferior proposal that exposes shareholders to a combination of cash and stock, an uncertain future commercial value of Global Networks' linear cable business, and a complex regulatory approval process. We present our offer directly to shareholders to give them the opportunity to act in their own interests and maximize the value of their shares.”
Ellison previously submitted three bids for WBD: one for $19 per share on Sept. 14, one for $22 per share on Sept. 30, and one for $23.50 per share on Oct. 19, made up of 80% cash and 20% stock. Warner Bros. Discovery's board of directors rejected all three offers. Paramount Skydance then submitted a cash offer of $26.50 per share on December 1, followed by one of $30 per share on December 4. The next day, WBD's board of directors selected Netflix as the buyer of WB and HBO Max.
All the information about Paramount's proposal can be found at strongerhollywood.com.
Source: https://cine3.com/paramount-oferta-adquisicion-hostil-warner-bros-discovery-mega-oferta/
