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Paramount Skydance (PSKY) launched a hostile $108B all-cash bid for Warner Bros Discovery (WBD) at $30 per share. This tops Netflix‘s (NFLX) $72B offer for WBD’s streaming and studio assets.
Paramount secured $54B in debt commitments from Bank of America, Citi and Apollo to back the takeover attempt.
Netflix’s original deal faced antitrust concerns as the combined entity would control over 40% of U.S. streaming subscribers.
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Warner Bros. Discovery (NASDAQ:WBD) has been the subject of an intense bidding war pitting Paramount Skydance (NASDAQ:PSKY) against Netflix (NASDAQ:NFLX) and Comcast (NASDAQ:CMCSA) across several rounds of bids.
The TV, movie studio, and streaming outfit ultimately accepted Netflix’s cash-and-stock offer valued at $72 billion for its streaming and studio business, including HBO Max and Warner Bros. film and TV operations. This deal, announced last Friday, left the company’s cable networks like CNN and TNT slated for a spinoff as Discovery Global.
Paramount grumbled publicly about a “tainted” process, accusing Warner Bros’ board of favoring a single bidder and undervaluing the full asset. Investors breathed a sigh of relief, assuming the saga had ended, but in a stunning twist, Paramount surprised the market by launching a hostile bid today, reigniting the battle.
Paramount’s move marks a dramatic escalation. The company announced a board-approved, fully financed all-cash tender offer of $30 per share for all outstanding shares of Warner Bros. Discovery, valuing the entire enterprise at approximately $108 billion. This tops Netflix’s bid by a wide margin — delivering shareholders an extra $18 billion in total value, according to Paramount’s filing.
To back the offer, Paramount secured $54 billion in debt commitments from Bank of America, Citi, and Apollo Global Management, alongside equity from the Ellison family, RedBird Capital, and sovereign wealth funds from Saudi Arabia, Qatar, the UAE, as well as Jared Kushner’s Affinity Partners. Paramount also filed for Hart-Scott-Rodino antitrust clearance and scheduled an investor call for today, signaling serious intent to close swiftly.
This isn’t Paramount’s first swing. CEO David Ellison submitted six proposals over 12 weeks, starting at $19 per share in September and climbing to $26.50 last week — all rejected. Ellison, in a CNBC interview, decried an “inherent bias” in the process and positioned the bid as a fight for shareholders on both sides. “We’re the largest investor here, battling for value,” he said.
The bids differ sharply in scope and structure. Netflix’s deal targets only Warner Bros’ crown jewels: the Warner Bros. studios, HBO, and HBO Max, at $27.75 per share in a cash-and-stock mix with an enterprise value of $82.7 billion. It excludes the declining cable assets, which Warner Bros plans to spin off separately — valued by executives at around $3 per share but dismissed by Paramount as just $1, laden with debt and weak fundamentals.
Regulatory hurdles loom large for Netflix, spanning U.S. antitrust scrutiny and international reviews, given the combined streaming dominance it would have (Netflix would control roughly one-third of U.S. subscribers). President Trump even flagged it Sunday as a potential “problem” for market share.
Paramount’s offer, by contrast, swallows Warner Bros Discovery whole — no spinoffs, no leftovers. It’s all cash, promising quicker closure and certainty amid cable’s woes. Paramount argues this preserves synergies, like cross-promoting content across Paramount+ and Max, while boosting theatrical output and jobs. Yet it invites its own antitrust questions: merging two major players could raise content acquisition costs for rivals.
A hostile takeover flips the script on traditional M&A. Instead of board approval, Paramount bypasses Warner Bros’ directors, appealing directly to shareholders via a tender offer. If enough investors tender shares (typically 50%+), it could force a deal, pressuring the board to negotiate or poison-pill defenses like share dilutions.
Hostile takeovers are rare in media, as they often drag on, spike legal fees, and fizzle if shareholders balk at premiums or risks. Still, they tend to jolt markets: Paramount’s stock is up nearly 6% this morning on bid momentum, Warner Bros Discovery climbed 5% toward $28 as arbitrage plays, while Netflix is falling 5% on the uncertainty the hostile bid introduces.
This hostile salvo supercharges the auction, potentially forcing Netflix to sweeten its bid — perhaps north of $80 billion — to hold ground. Ellison’s all-in play, though, highlights Warner Bros’ complaint Paramount was undervaluing its business.
But Netflix’s pact was already a tough sell for many: Commentators everywhere panned the deal, Wall Street called it the “lowest-probability outcome,” while creatives worried about further industry consolidation stifling diversity. Regulators, no doubt, were already eying monopoly risks.
If bids climb, Warner Bros Discovery comes out even more on top, though endless haggling could erode value for the winner. Hostile takeovers aren’t often successful, with some estimating a less than 40% success rate. However, a big enough premium could sway shareholders that the new bid is the preferred one.
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