WBD Asks Shareholders to Hold Off on Decisions While Evaluating Paramount’s Updated Takeover Proposal
Warner Bros. Discovery Reviews Paramount’s Tender Offer
Warner Bros. Discovery (WBD) has acknowledged receiving an amended tender offer from Paramount Skydance, stating that it will "carefully review and consider" the proposal in line with its fiduciary duties and with input from its independent financial and legal advisors.
Paramount Skydance has proposed to acquire WBD’s outstanding shares at $30 each in cash. This latest offer follows a previous bid that was unanimously rejected by WBD’s board, which instead opted to sell its studio and streaming assets to Netflix following a swift auction. On December 8, Paramount took its case directly to shareholders with a hostile tender offer. While today’s amended offer does not increase the monetary amount, it aims to address several concerns raised by WBD’s leadership, particularly CEO David Zaslav.
"The WBD Board carefully reviewed the December 8 Tender Offer and determined that it provided inadequate value and imposed numerous significant risks and costs on WBD and its stockholders," WBD stated. The board emphasized that the proposal did not meet the qualifications of a “Superior Proposal” under its existing agreement with Netflix and remains committed to that arrangement.
Shareholders of WBD are encouraged to withhold action regarding the amended tender offer from Paramount Skydance at this time. They have until January 21 to tender their shares, which is now backed by a $40.4 billion personal equity financing guarantee from Larry Ellison, co-founder of Oracle and father of Paramount CEO David Ellison. The amended proposal also includes an increased breakup fee of $5.8 billion and augmented financial flexibility during the interim period.
The prior offer from Paramount included a financing backstop commitment from the Ellison Family Revocable Trust, but WBD deemed it too risky, according to an SEC filing last week.
In an interview on CNBC, Gerry Cardinale, founder and managing partner of RedBird Capital and a partner with the Ellisons in Paramount Skydance, dismissed the Trust issue as a "red herring" that hindered the serious evaluation of their offer. He confirmed, “It is now off the table.”
