Paramount has launched a £108.4bn hostile bid for Warner Bros, challenging Netflix, which had reached a $72bn takeover deal with the company.
Paramount said on Monday that it was going straight to Warner Bros Discovery (WBD) shareholders with a $30 per share in cash offer for the entirety of the company, including its Global Networks segment, asking them to reject the deal with Netflix.
On Friday Netflix struck a deal to buy WBD, the Hollywood giant behind “Harry Potter” and HBO Max
The agreement means Warner Bros Discovery’s library of film and TV successes including Harry Potter and Game Of Thrones will come under the same roof as Stranger Things and Squid Game.
The cash and stock deal is valued at $27.75 per Warner share, giving it a total enterprise value of $82.7 billion, including debt.
But Paramount says its deal will pay $30 cash per share, representing $18 billion more in cash than its rivals are offering.
In a statement, Paramount said it was making a “strategically and financially compelling offer to WBD shareholders” and a “superior alternative to the Netflix transaction”.
File pic: iStock
David Ellison, chairman and CEO of Paramount, said: “WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company.
“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.
“We believe the WBD Board of Directors is pursuing an inferior proposal which exposes shareholders to a mix of cash and stock, an uncertain future trading value of the Global Networks linear cable business and a challenging regulatory approval process.
“We are taking our offer directly to shareholders to give them the opportunity to act in their own best interests and maximize the value of their shares.”
Paramount said it had submitted six proposals to WBD in the course of 12 weeks, but that they were never “meaningfully” engaged with.
It’s not the first difficulty the proposed Netflix deal has run into, with Donald Trump raising the spectre of government intervention on Sunday.
The US president said the combined market share of the resulting company “could be a problem” and that he would be involved in the decision about whether to approve the deal.
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