In a dramatic escalation of the streaming wars, Paramount Skydance has bypassed the WBD board with an all-cash offer to derail Netflix's acquisition plans.
NEW YORK - In a move that reshapes the battlefield of the global streaming wars, Paramount Skydance launched a hostile takeover bid for Warner Bros. Discovery (WBD) on Monday, offering $108.4 billion in an all-cash deal designed to derail a rival agreement with Netflix. The aggressive maneuver marks a significant escalation in the consolidation of Hollywood's legacy studios as they fight for survival and dominance in the digital age.
Paramount, led by David Ellison, is bypassing the WBD board of directors to appeal directly to shareholders with a tender offer of $30 per share. This bid represents a dramatic counter-play just days after Netflix reportedly secured a deal to acquire portions of the Warner Bros. empire. By offering immediate liquidity and a complete buyout, Paramount is betting that shareholder appetite for cash will outweigh the strategic allure of a partnership with the streaming market leader.
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The financial scale of the proposal places it among the upper echelons of hostile takeover attempts in recent history. According to filings released Monday, the offer values Warner Bros. Discovery at an enterprise value of $108.4 billion, a figure that includes the assumption of WBD's substantial debt load. The equity value alone stands at approximately $77.9 billion.
The breakdown of the bid reveals a calculated strategy to win over skeptical investors:
"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." - Paramount Statement
This hostile maneuver follows a turbulent period for Warner Bros. Discovery. Just last Friday, reports surfaced that Netflix had agreed to purchase the studio's entertainment assets and streaming service for roughly $83 billion. Paramount characterized this competing arrangement as "inferior," arguing that their all-cash bid for the entire company offers $18 billion more in cash value and avoids the complexities of breaking up the media giant.
According to Fortune, Paramount revealed a "2-year-long pursuit" of WBD, noting that the board's lack of engagement and recent pivot toward Netflix fueled the decision to go hostile. By taking the offer directly to shareholders, Paramount is effectively initiating a referendum on the company's future leadership and strategy.
The reaction across the industry has been immediate. David Ellison, CEO of Paramount Skydance, told CNBC that the move is intended "to finish what we started," emphasizing the industrial logic of combining two legacy studios to compete against tech-native giants. Meanwhile, The Guardian reports that Netflix leaders expressed "little concern" regarding the rival bid during an industry event on Monday, suggesting confidence in their own agreement with the WBD board.
However, Reuters notes that Paramount's bankers have signaled the $30 per share offer is "not best and final," indicating room for negotiation if a bidding war ensues. This puts significant pressure on the WBD board to justify their preference for the Netflix deal if the financial terms remain lower than Paramount's cash offer.
The potential acquisition of Warner Bros. Discovery by Paramount would create a media behemoth capable of challenging Disney and Netflix in terms of library depth and intellectual property. Combining the catalogs of Paramount Pictures, CBS, HBO, Warner Bros., and Discovery would result in an unprecedented centralization of content.
From a business perspective, the all-cash nature of the deal highlights the liquidity available to private equity-backed players like Skydance, contrasting with the stock-heavy or asset-split deals often seen in the sector. However, regulators are likely to scrutinize such a massive consolidation heavily. While Paramount argues their path to regulatory approval is "easier" than Netflix's, combining two major news divisions (CBS News and CNN) and film studios will inevitably invite antitrust review.
With the tender offer expiring on January 8, the clock is ticking for Warner Bros. Discovery shareholders. They must now decide between the immediate certainty of Paramount's cash or the strategic promise of the Netflix integration endorsed by their board.
Experts predict a volatile month ahead for media stocks. If WBD shareholders tender enough shares to threaten the board's control, it could force the directors to the negotiating table or compel Netflix to sweeten its own offer. As Reuters indicated, the door is open for a higher price, suggesting that this $108 billion salvo is likely just the opening move in the final battle for Hollywood's crown jewels.
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