Paramount announced Monday that it has launched a hostile takeover to acquire Warner Bros. in a deal that would give shareholders $18 billion more in cash than the $82.7 billion Netflix announced last week.
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Paramount, led by David Ellison, announced it will offer $30 per share for Warner Bros. Discovery and sharply criticized the $27.75 per share deal with Netflix, calling it “inferior and uncertain value” and exposing Warner Bros. shareholders to a lengthy regulatory clearance process.
Unlike the deal reached with Netflix, which covered Warner’s movie studio and streaming service, and which would involve spinning off the company’s Global Networks division, Discovery Global, into a new company that will go public next year, Paramount’s offer covers all of Warner Bros. Discovery.
Paramount’s all-cash offer amounts to $108.4 billion, while Netflix’s $82.7 billion combines cash ($23.25 per share) and stock ($4.50).
Read more: Trump says Netflix’s combined market share with Warner Bros. ‘could be a problem’
The announcement comes a day after President Donald Trump, who counts the billionaire Ellison family among his top supporters, warned that the Netflix deal could draw antitrust scrutiny and said the two entities’ combined market share in the streaming market could be a problem.
Netflix said it expected the deal would take 12 to 18 months to close, pending necessary regulatory approvals, Warner shareholder approval and other conditions, while Paramount said it was fully confident in obtaining regulatory approval quickly with its proposal.
Paramount announced that it made its offer public — and directly to Warner Bros. shareholders — after Warner Bros. failed to meaningfully commit to six Paramount proposals submitted over the course of 12 weeks.
Crucial ideals
“We believe that the WBD Board of Directors is pursuing an inferior proposal that exposes shareholders to a combination of cash and stock, an uncertain future commercial value of Global Networks’ linear cable business and a complex regulatory approval process,” Ellison said Monday.
This article was originally published in Forbes US
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