In an attempt to thwart Netflix’s competing proposal to purchase Warner Bros. Discovery’s studio and streaming channels, Paramount Skydance has made an additional bid to acquire the company. Supported by the billionaire Ellison family, Paramount said that it was directly offering stockholders $30 (£22.50) per share to acquire Warner Bros. in its entirety, including its conventional television channels.
It said that its plan was a “superior alternative” to Netflix’s, offering shareholders more money up front and a higher chance of regulatory approval. Given the magnitude of the firms, President Donald Trump has stated that “there could be a problem” with Netflix’s acquisition, citing concerns about competition.
Known for brands including CBS News, Nickelodeon, and Mission Impossible, Paramount is a lesser player than Netflix. A few months ago, it began submitting offers, which ultimately led to Warner Bros. This company owns HBO and legendary films like Harry Potter and Looney Tunes, and started an auction.
For a long time, Wall Street experts have said a Paramount-Warner Bros. merger makes sense since it would give the business the size to take on competitors like Netflix and Disney. Because of the expectation that Trump’s relationship with the Ellison family—which includes Republican megadonor and tech billionaire Larry Ellison—would facilitate approval, Paramount was also viewed as an influential contender.
However, Warner Bros. announced an agreement that valued its studio and streaming networks, including HBO, at roughly $83 billion (£62.3 billion), including debt, and pronounced Netflix the winner of the auction on Friday. It stated that the transaction would take place following a planned spin-off of CNN and other Warner Bros. divisions into a separate firm.
Paramount valued the entire company at $108.4 billion in its bid, which it claimed was a superior deal. According to documents filed with the Securities and Exchange Commission, Paramount is collaborating with Trump’s son-in-law, Jared Kushner, among other business partners.
On Monday, Netflix executives dismissed Paramount’s move as “entirely expected” and voiced optimism regarding its intentions. Warner Bros. stated that while it would examine the offer, its verdict would not be altered at this time. It promised to reply in ten business days.
Competition authorities in the US and Europe are anticipated to scrutinize either acquisition.
According to experts, given the merged company’s clout in sports and children’s channels, Paramount’s plan would require an assessment of its impact on advertising and local television distributors. At the same time, Netflix’s offer raises questions about the streaming monopoly.
Due to the Ellisons’ connections to Trump and the possible effects on the news industry, Paramount’s efforts to combine CBS and CNN under a single parent company have also been widely monitored. Over the weekend, the president stated that he anticipated participating in the approval procedure. However, he hasn’t been very explicit about his opinions. He commended the streamer’s executives on Sunday while pointing out possible issues with Netflix’s partnership. On Monday, he criticized Paramount on social media for a 60 Minutes interview with Republican lawmaker Marjorie Taylor Greene, a longtime Trump loyalist.
David Ellison, the CEO of Paramount, told CNBC in an interview that he had “great conversations” with Trump regarding the agreement, but he declined to speak on the president’s behalf. With over 300 million users, Netflix is the largest streaming service globally.
Mr. Ellison’s strategy would expand upon his acquisition of Paramount earlier this year, which he integrated into his Skydance production company. Ben Barringer, director of technology research at Quilter Cheviot, stated that “Paramount ultimately needs this deal more than Netflix,” describing the Warner Bros. assets as only “nice to have” for the streamer.
