Paramount is going hostile.
After Warner Bros. Discovery chose to accept Netflix’s acquisition bid last week, David Ellison’s company launched an all-cash tender offer for $30 per share on Monday morning, noting that WBD is now obligated to take this offer — at a steeper price point than Netflix’s $27.75 per share bid — directly to shareholders.
This new offer notably is a bid for all of the company, which includes global networks as well as studios and streaming, whereas Netflix only wants the latter once they are spun off at WBD. The offer is also $18 billion more than Netflix’s, amounting to an enterprise value of $108.4 billion, per Paramount.
“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,” Ellison said in a statement. “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.”
“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,” he continued. “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.”
The company’s press release also accused WBD of never engaging “meaningfully” with Paramount’s prior six proposals over the course of 12 weeks. Their $30 per share offer represents a 140% premium from where WBD stock was languishing on Sept. 10 at $12.54, before Paramount’s initial interest boosted the price.
TheWrap’s The Reset newsletter several weeks ago also suggested going hostile might be the best path for Paramount. Hostile, or even unsolicited, bids have not been that common in media and entertainment. In 2022, hedge fund Alden Global Capital made an unsolicited offer of $24 a share to acquire Lee Enterprises, including a proxy contest to replace board members — a classic hostile-takeover strategy. Lee resisted via a “poison pill” shareholder-rights plan, rejected Alden’s offer, and successfully defended the board. In 2024, Edgar Bronfman Jr. and a group of investors submitted a rival unsolicited bid of reportedly $4.3 billion initially to acquire Paramount, after the company had agreed to merge with Skydance.
On Thursday, WBD and Netflix entered exclusive talks after the streaming giant offered $27.75 a share for the legacy studio’s assets, a mix of cash and stock worth $82.7 billion, with regulatory approval still 12-18 months away. Netflix will have to pay a breakup fee of $5.8 billion if it walks away, while it gets $2.8 billion if WBD backs out.
