According to industry reports, Warner Bros. has once again turned down Paramount’s latest acquisition proposal, urging shareholders to favour a competing offer from Netflix.
Despite Paramount’s persistent attempts to acquire Warner Bros., the company’s leadership has consistently dismissed these overtures. Just weeks ago, they advised shareholders to endorse Netflix’s US$72 billion proposal for Warner’s streaming and studio business. In contrast, Paramount has upped its bid to US$77.9 billion for the entire Warner Bros. entity and is directly appealing to shareholders with a hostile offer.
On Wednesday, Warner Bros. Discovery’s board stated that Paramount’s offer does not align with the company’s or its shareholders’ best interests. It reiterated its recommendation that shareholders back the Netflix deal.
Last month, Paramount announced an “irrevocable personal guarantee” from Larry Ellison, the Oracle founder and father of Paramount’s CEO, David Ellison, which backs US$40.4 billion in equity financing for its offer. Additionally, Paramount has increased its shareholder payout to US$5.8 billion if regulators block the deal, matching Netflix’s proposal.
The competition for Warner Bros. is complicated, as Netflix and Paramount have differing objectives. Netflix’s acquisition proposal focuses solely on Warner’s studio and streaming operations, including its historic TV and film production arms and platforms such as HBO Max. On the other hand, Paramount seeks to acquire the entire company, which includes networks such as CNN and Discovery.
If Netflix succeeds, Warner’s news and cable segments would be separated into a distinct entity, as previously planned.
Any merger involving either company is likely to face intense scrutiny regarding antitrust laws. Given the size and implications of the deal, it will almost certainly lead to a review by the U.S. Justice Department, which has the authority to block the transaction or impose conditions. Other global regulators may also present challenges to the merger.
