Activist Investor Critiques WBD’s Quick Move on Netflix Deal, Urges Board to Consider Paramount As Tensions Increase
Activist investor Ancora Holdings, a shareholder in Warner Bros. Discovery (WBD), has issued a warning that it may oppose the proposed Netflix deal and initiate a proxy fight if the WBD board fails to negotiate with Paramount.
On Tuesday, Paramount, led by David Ellison, enhanced its hostile takeover offer for WBD, aiming to undermine the company’s existing agreement with Netflix.
In a recent presentation, Ancora stated, “The WBD board now has no choice but to deem Paramount’s amended offer as one that could reasonably be expected to result in a Superior Proposal, given Netflix’s presently inferior proposal and unaddressed regulatory issues. Once that happens, the Board could then engage in good faith with Paramount to maximize shareholder value, paving the way for WBD to secure an even higher offer. If the WBD Board refuses to do this, Ancora will vote ‘NO’ on the inferior Netflix deal and seek to hold the WBD Board accountable at the 2026 meeting.”
Ancora further criticized the WBD board’s decision to move forward with Netflix, stating, “The WBD Board opted to rush into a flawed deal with Netflix rather than earnestly pursue a superior offer from Paramount – in line with the directors’ fiduciary duties.” The nearly $11 billion firm has approximately $200 million invested in Warner Bros. Discovery.
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WBD acknowledged on Tuesday that it is reviewing Paramount’s revised offer, which addresses many of the board’s concerns. Following Ancora’s statements, WBD reiterated its commitment: “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. We remain resolute in our commitment to maximize value for shareholders.”
David Joyce, an analyst at Seaport Research, remarked, “Paramount Skydance just made things more interesting… Could the WBD Board take PSKY more seriously? Is this potentially an elegant off-ramp for NFLX?” He noted that Paramount had substantially addressed the WBD board’s concerns with its enhanced offer.
Although Paramount maintained its cash bid of $30 per share, it has introduced a new $0.25-per-share “ticking fee” payable to WBD shareholders for each quarter the transaction remains open past December 31, 2026. Additionally, Paramount has committed to fund a $2.8 billion termination fee to Netflix if WBD decides to withdraw from its agreement.
Gerry Cardinale of RedBird Capital, an investor in Paramount, described the offer as “perfected,” clarifying that any clerical issues that may have hindered engagement with WBD have been resolved. He affirmed, “We will fund the $2.8 billion breakup fee. If they terminate with Netflix, we will pay that immediately to Netflix. This does not come out of what we’re paying to Warner Bros. shareholders in our $30 a share all-cash offer.”
Paramount’s bid of $30 in cash for all of WBD comes in contrast to Netflix’s agreement to acquire Warner Bros. studios and streaming assets at $27.75 in cash. In a separate arrangement, WBD plans to spin off its linear television assets, forming a new public entity called Discovery Global.
More to come
