Paramount Launches Hostile Takeover Bid for Warner Bros. Discovery in $108 Billion Power Play

Paramount Global has launched a surprise hostile takeover bid for Warner Bros. Discovery. The aggressive $108.4 billion all-cash offer was made public on Monday. It directly challenges a prior acquisition deal between Warner Bros. Discovery and streaming giant Netflix.

The move sets the stage for a major corporate battle in Hollywood. Paramount is taking its offer directly to Warner Bros. Discovery shareholders after its board reportedly rejected similar terms.

Paramount’s Offer Presents Shareholders With a $18 Billion Premium

Paramount is offering $30 per share in cash for all of Warner Bros. Discovery. According to CNBC, this proposal was formally rejected by the WBD board just last week. The company is now appealing directly to investors.

This new bid represents a significant premium. Paramount states its offer provides shareholders $18 billion more in cash than the competing Netflix arrangement.

Netflix had previously agreed to acquire WBD’s studios and streaming assets for $82.7 billion. That deal involved a mix of cash and stock valued at $27.75 per share.

Paramount CEO David Ellison criticized the Netflix agreement. He called it an “inferior proposal” in a public statement on Monday.

Financing and Regulatory Hurdles Loom Over Bidding War

The massive bid is backed by substantial financing. Equity commitments come from the Ellison family and RedBird Capital. Bank of America, Citi, and Apollo have provided $54 billion in debt financing.

This hostile bid extends a months-long battle for the iconic studio. Netflix emerged as the initial winner last Friday after a bidding war with Paramount and Comcast.

Both potential deals face serious regulatory scrutiny. A Netflix-WBD merger would combine two streaming giants. A Paramount deal would also likely raise significant antitrust questions.

President Donald Trump has already commented on the Netflix agreement. He suggested the deal’s size “could be a problem.” Similar concerns would apply to a Paramount takeover.

The agreements include hefty breakup fees. Warner Bros. Discovery would owe Netflix $2.8 billion if it walks away. Netflix would pay WBD $5.8 billion if its deal fails to close.

The hostile takeover bid fundamentally reshapes the media landscape battle. It forces Warner Bros. Discovery shareholders to choose between two starkly different futures for the company.

Info at your fingertips

Q1: What is a hostile takeover bid?

A hostile bid is an offer to buy a company made directly to its shareholders. It happens when the target company’s board of directors rejects the initial proposal. The acquiring company tries to persuade shareholders to sell their shares anyway.

Q2: Why does Paramount think its offer is better?

Paramount emphasizes its offer is all-cash at $30 per share. It argues this is superior to Netflix’s mix of cash and stock worth $27.75 per share. The company believes its deal provides more certainty and immediate value.

Q3: What are the main regulatory concerns?

Regulators are concerned about market concentration. A Netflix-WBD deal would merge two major streaming platforms. A Paramount-WBD deal would create a massive traditional and streaming media conglomerate, raising similar antitrust flags.

Q4: What happens if Warner Bros. Discovery chooses Netflix now?

If WBD sticks with Netflix, the Paramount bid ends. The Netflix acquisition of WBD’s studios and streaming business would then proceed. It would still require regulatory approval which is not guaranteed.

Q5: Who is financing Paramount’s huge bid?

The bid is financed through a combination of sources. The Ellison family and RedBird Capital are providing equity. Major banks including Bank of America and Citi, along with Apollo, have committed $54 billion in debt.