Paramount Makes Bold Move with Takeover Offer for Warner Bros. Discovery
Paramount Launches Tender Offer to Acquire Warner Bros. Discovery for $30 per Share
Paramount announced on Monday that it has initiated an all-cash tender offer to acquire all outstanding shares of Warner Bros. Discovery (WBD) for $30 per share, valuing the transaction at approximately $108.4 billion. This strategic move aims to attract WBD away from a recent agreement with Netflix.
“The Paramount offer for the entirety of WBD provides shareholders $18 billion more in cash than the Netflix consideration. WBD’s Board of Directors recommendation of the Netflix transaction over Paramount’s offer is based on an illusory prospective valuation of Global Networks that is unsupported by the business fundamentals,” stated the company.
This unsolicited bid comes after a contentious auction where CEO David Zaslav’s media giant, Warner Bros. Discovery, turned down multiple offers from Paramount. Last Friday, WBD announced it had secured a deal with Netflix, valued at $72 billion (with an enterprise value of $82.7 billion), involving $27.75 per share in cash and stock. This arrangement includes a plan to spin off its linear television business into a separate company by Q3 2026, with both parties anticipating a 12 to 18-month timeline for regulatory approval.
Paramount’s proposed acquisition includes all of WBD’s assets, notably the Global Networks segment. “Paramount’s strategically and financially compelling offer to WBD shareholders provides a superior alternative to the Netflix transaction, which offers inferior and uncertain value,” Paramount emphasized.
Paramount CEO David Ellison expressed confidence in the bid, stating, “WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company.” He criticized the Netflix deal as exposing shareholders to a complex mix of cash and stock, alongside an uncertain regulatory landscape.
To support the offer, the Ellison family, alongside RedBird Capital and financial commitments totaling $54 billion from Bank of America, Citi, and Apollo, are backing the proposal.
Paramount asserted confidence in receiving regulatory clearance, arguing that its offer promotes competition and benefits consumers. In contrast, the company criticized the potential Netflix acquisition as anti-competitive, warning of risks such as increased prices for consumers and diminished pay for content creators.
“Paramount has now taken its offer directly to WBD shareholders and its Board of Directors to ensure they have the opportunity to pursue this clearly superior alternative,” Ellison added. He believes the merger would strengthen Hollywood by enhancing competition, increasing content production, and benefiting the theater industry.
As the situation continues to evolve, the tender offer will remain open until January 8 at 5 p.m. ET unless extended.
