David Ellison’s Paramount Skydance has launched a hostile cash bid for all of Warner Bros Discovery (WBD), following news that Netflix had won the bidding war for the film and TV assets of WBD last week.
In a press release, Paramount said it had bypassed the WBD board and gone directly to WBD shareholders to offer $30 a share, in what it described as a “strategically and financially compelling offer to WBD shareholders”.
It said this was a “superior alternative to the Netflix transaction, which offers inferior and uncertain value and exposes WBD shareholders to a protracted multi-jurisdictional regulatory clearance process with an uncertain outcome along with a complex and volatile mix of equity and cash”.
“WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company,” said David Ellison, chairman and CEO of Paramonunt.
”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. We believe the WBD Board of Directors is pursuing an inferior proposal which exposes shareholders to a mix of cash and stock, an uncertain future trading value of the Global Networks linear cable business and a challenging regulatory approval process. We are taking our offer directly to shareholders to give them the opportunity to act in their own best interests and maximize the value of their shares.”
The move comes after Friday’s announcement that Netflix had struck an agreement in principle with WBD, but Paramount said its offer would provide shareholders with an additional $18bn in cash.
Paramount Skydance, which has already had three bids for WBD knocked back, said WBD’s board of directors’ recommendation for the Netflix bid was “based on an illusory prospective valuation of Global Networks that is unsupported by the business fundamentals and encumbered by high levels of financial leverage assigned to the entity”.
The company said a merged Paramount-WBD would be a “transformative force” and a “scaled Hollywood champion”.
”Paramount will invest to grow the creative engines at the heart of WBD and Paramount, maintaining the studios of both companies and focusing on attracting and retaining world-class creative talent to grow the scaled supply of high-quality content for our combined services and third-party distribution,” said the statement. “This includes maintaining the current WBD theatrical slate with plans for additional growth.”
It also said it would be a ”stronger supporter of movie theaters”.
“Paramount strongly believes in the value of releasing feature movies in theaters and will continue to do so for the theatrical content of both Paramount and WBD studios.”
No comments yet