Activist investor Ancora Holdings has amassed a roughly $200 million stake in Warner Bros. Discovery and plans to oppose Netflix’s $83 billion deal to acquire its studio and streaming assets. The stake accounts for less than 1% of WBD’s total outstanding shares.
The firm, which has $11 billion in assets under management, believes that Warner’s board has failed to adequately engage with Paramount Skydance’s $30 per share, all-cash offer for the entire company. In a 51-page presentation to investors, Ancora laid out its argument for why it believes the Paramount deal is the superior offer and the Netflix deal is “flawed, inferior and high risk.”
Per the presentation, the firm noted that the Ellisons are proposing to give shareholders “real financial certainty” compared to Netflix’s “highly questionable” offer comprised of $27.75 per share and stock from the pending spinoff of Discovery Global.
“Paramount’s current offer – and any future modified proposal – has the credible backing of the Ellison Trust and has a viable path to regulatory approval based on public reports and analyses of policymaker feedback,” Ancora said. “Paramount has indicated its willingness to improve its proposal – stating that its offer was not “best and final” – demonstrating that there is a value-maximizing path forward. Paramount even enhanced its offer with a $0.25 per share “ticking fee,” demonstrating its confidence and commitment to seeing the deal through.”
In comparison, the firm says that WBD is asking shareholders to vote for “an uncertain final cash consideration based on an unknown debt allocation and an unknown equity value of the Discovery Global spinoff.” It also said that initial reactions from U.S. and European policymakers cite “extreme concern over antitrust issues” with the Netflix deal and that the streamer “appears to lack the political relationships that Paramount has with the current administration.”
Additionally, Ancora said that WBD CEO David Zaslav and an undisclosed “working group” of the board led negotiations rather than establishing an independent committee and that the full board only convened three times between receipt of initial bids and approval of the Netflix deal, raising questions about independent oversight and whether the board’s directors had “sufficient opportunity to supervise negotiations and evaluate competing proposals.”
“The WBD Board opted to rush into a flawed deal with Netflix rather than
earnestly pursue a superior offer fromParamount – in line with the directors’
fiduciary duties,” Ancora argued.
Additionally, Ancora touted the “strong backing” from the Ellison family trust, which has “a demonstrated record of funding large-scale deals and has never been in default on any of its prior financial obligations and/or guarantees – reinforcing the credibility and executability of Paramount’s fully backstopped equity commitment.”
“Paramount has opened the door to renewed engagement and negotiations with WBD by submitting an updated proposal that addresses the various inferiority claims made by WBD and provides additional certainty,” Ancora concluded. “WBD’s Board should determine that Paramount’s amended offer could reasonably be expected to result in a “Superior Proposal,” which would enable WBD and Paramount to re-engage and revive a process to determine the highest bidder and maximize shareholder value.”
If the WBD board does not reopen discussions with Paramount, Ancora is threatening to vote against the Netflix deal and “hold the WBD board accountable” at its 2026 annual meeting by seeking to elect its own slate of directors.
Warner Bros. Discovery’s board said it would “carefully review and consider” the proposal, but noted that it wouldn’t change its recommendation on the Netflix deal.
The board is advising shareholders to not take any action at this time and will provide an update on its decision with regard to the latest Paramount offer following a review and consultation with its financial advisors Allen & Company, J.P. Morgan and Evercore and legal counsel Wachtell Lipton, Rosen & Katz and Debevoise & Plimpton LLP.
“WBD’s experienced and independent Board and management team have a proven track record of acting in the best interests of the Company and shareholders – as evidenced by the extensive actions they have taken to unlock the full value of WBD’s unmatched portfolio of assets over the last year,” a spokesperson told TheWrap on Wednesday. “We remain resolute in our commitment to maximize value for shareholders.”
Representatives for Netflix declined to comment on Ancora’s presentation.
On Tuesday, Paramount CEO David Ellison amended its $30 per share bid, marking its ninth proposal to date. The latest offer includes a 25 cent per share ticking fee, which is the equivalent of approximately $650 million cash value each quarter, that would be paid to shareholders for every quarter the transaction is not closed beyond Dec. 31, 2026.
The company has also committed to funding a $2.8 billion termination fee payable to Netflix and reimbursing WBD shareholders for a $1.5 billion financing cost associated with a debt exchange without reducing its $5.8 billion breakup fee.
Paramount also said it would either extend the company’s existing $15 billion bridge loan and cover any incremental costs to do so or permit WBD
to “structure permanent financing in any way it chooses so long as the debt is redeemable at a commercially reasonable cost.”
Additionally, Paramount said it would provide flexibility between signing and closing of a deal, including by matching any comparable Netflix interim operating covenants, and said it is open to discussing “contractual solutions to account for the possibility of continuing deteriorating financial performance beyond what WBD is currently projecting for its linear network business.”
The amended offer includes $43.6 billion of equity commitments from the Ellison family and RedBird Capital Partners and $54 billion of debt commitments from Bank of America, Citigroup and Apollo. Oracle co-founder Larry Ellison has also made an irrevocable personal guarantee towards $43.3 billion of the equity financing as well as any damage claims against Paramount.
The latest twist comes as 42.3 million shares have been validly tendered to Paramount as of Monday, a 75% decline from its prior disclosure of 168.5 million shares tendered on Jan. 21 and a small portion of WBD’s total 2.48 billion outstanding shares. Investors can withdraw their tender at any time before the Feb. 20 deadline.
Paramount also said it has complied with the Department of Justice’s second request for information on Monday as regulator reviews its tender offer. The waiting period will expire 10 calendar days after Paramount certified “substantial compliance with such request” at 11:59 p.m. ET. However, even if Paramount’s bid clears the Hart-Scott-Rodino (HSR) review period, the DOJ can still investigate or challenge a potential deal with Warner Bros.
Additionally, Paramount said it received clearance from foreign investment authorities in Germany on Jan. 27, though that only addresses national security concerns and is one of more than a dozen foreign investment clearances needed. European regulators can still investigate the deal for potential antitrust concerns.
In addition to the latest bid, Paramount has launched its own proxy battle and is urging shareholders to vote against the Netflix deal as well as the pending spinoff of Warner’s cable networks into Discovery Global. Shareholders are expected to vote on the Netflix deal by April. It is expected to close within 12 to 18 months, pending regulatory approval.
