Paramount Launches $108.4B Hostile Bid for Warner Bros.

Paramount Skydance has initiated a hostile $108.4 billion takeover bid for Warner Bros. Discovery (WBD), directly challenging a deal recently struck between WBD and Netflix. The move comes only days after Warner Bros. Discovery reached an agreement to be acquired by Netflix in a transaction valued at $82.7 billion.

A Direct Appeal to Shareholders

By bypassing the WBD board, which had previously rejected these exact terms a week ago, Paramount is taking its all-cash tender offer directly to shareholders. The proposal values WBD at $30 per share.

Paramount’s pitch centers on a significant premium compared to the Netflix agreement. According to the company, the offer provides shareholders with $18 billion more in cash than the Netflix bid, which consisted of $23.25 in cash and $4.50 in Netflix stock, totaling $27.75 per share.

Strategic Differences and Financial Backing

The scope of the two offers also differs significantly. While the Netflix acquisition is restricted to WBD’s Hollywood studios and streaming operations, Paramount’s bid seeks to acquire the entirety of Warner Bros. Discovery.

Paramount CEO David Ellison criticized the WBD board’s current direction in a formal statement, arguing that the Netflix proposal exposes investors to:

• The volatility of a combined cash-and-stock payout.
• Uncertain future valuations for the Global Networks linear cable division.
• A complex and potentially lengthy regulatory approval process.

To fund the aggressive bid, Paramount has secured significant financial support, including:

• Equity financing from the Ellison family and RedBird Capital.
• $54 billion in committed debt financing from Bank of America, Citi, and Apollo.

Regulatory and Competitive Hurdles

The battle for WBD, which has persisted for months, remains fraught with antitrust scrutiny. The proposed Netflix merger has already faced pushback, with President Donald Trump suggesting the combination could be problematic due to excessive market share. Experts note that a potential merger between Paramount and WBD would likely encounter similar regulatory challenges.

Financial penalties remain a key factor in the ongoing drama. Netflix stands to receive a $2.8 billion break-up fee from WBD should the deal be abandoned, whereas Netflix would be required to pay $5.8 billion if it fails to close the transaction. As of Monday, Netflix had not provided a comment regarding the new hostile bid, as reported by CNBC.