Paramount Places All-Cash Bid Of $30 Per Share For Warner Bros. Discovery — ‘We Believe Our Offer Will Create A Stronger Hollywood’ – AfroTech
Paramount has placed an all-cash bid for Warner Bros. Discovery Inc. (WBD).
As AFROTECH™ previously reported, WBD had reached an agreement with Netflix to be acquired for a total enterprise value of $82.7 billion (equity value of $72.0 billion). The deal would include Warner Bros.’ film and television studios, HBO Max, and HBO, but not Discovery or its cable networks such as CNN and TNT, per NBC News.
The deal was approved unanimously by both companies’ board of directors. However, for the acquisition to be finalized, it would require approval from the Justice Department’s antitrust division and, likely, the European Commission and other governments globally, notes NBC News.
President Donald Trump has shared his thoughts on the matter, per the outlet, stating, “Well, that’s got to go through a process, and we’ll see what happens. They have a very big market share. When they have Warner Bros., that share goes up a lot.”
Paramount has now also placed a bid to purchase WBD. According to a press release, Paramount has made an “all-cash tender offer to acquire all of the outstanding shares of Warner Bros. Discovery, Inc.” With an offer of $30.00 per share, equating to an enterprise value of $108.4 billion, Paramount’s offer would result in $18 billion more in cash than Netflix’s, per the release.
The company also claims its offer has other advantages over that of Netflix, pointing to the “volatile and complex structure” of Netflix’s proposal with a mix of cash and stock that is dependent upon the future performance of Netflix and an extended regulatory process. Paramount’s offer is also for the entirety of WBD, including its Global Networks linear cable business.
Paramount had previously submitted six proposals over the span of 12 weeks, which it claims were not entertained by Warner Bros. So, Paramount is now contacting WBD’s shareholders and board of directors to gauge interest.
“WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company,” David Ellison, chairman and CEO of Paramount, said in the press release. “Our public offer, which is on the same terms we provided to the Warner Bros. Discovery Board of Directors in private, provides superior value and a more certain and quicker path to completion.”
Ellison continued, “We believe our offer will create a stronger Hollywood. It is in the best interests of the creative community, consumers, and the movie theater industry. We believe they will benefit from the enhanced competition, higher content spend and theatrical release output, and a greater number of movies in theaters as a result of our proposed transaction. We look forward to working to expeditiously deliver this opportunity so that all stakeholders can begin to capitalize on the benefits of the combined company.”
In a press release shared Dec. 10 by Paramount, the company claimed various shareholders at Warner Bros. expressed confusion and disappointment over WBD’s chosen process of pursuing a deal, which it claims favors Netflix over shareholder value maximization.
“Multiple equity research notes published over the last 48 hours have also agreed that our offer is superior and that the Global Networks spin-off does not close the gap to $30.00 in cash,” Ellison said in the release.
Paramount’s offer will stand for at least 20 days and is dependent on the “majority of WBD shares tendering in our favor, receipt of regulatory approvals, termination of the Netflix merger agreement, and entry into a definitive merger agreement with us,” Ellison explained.
It is expected that there will be an update from WBD on Paramount’s offers within 10 business days from Dec. 10, per the release.
