Paramount Skydance launches hostile takeover offer Discovery of Warner Bros. after losing to Netflix in a months-long bidding war for legacy assets, the company said Monday.
Paramount will go directly to WBD shareholders with an all-cash offer of $30 per share. This is the same offer that WBD rejected last week and equates to an enterprise value of $108.4 billion.
The offering is supported by equity financing from the Ellison family and private equity firm RedBird Capital, as well as $54 billion in debt commitments from Bank of America, Citi and Apollo Global Management, Paramount said in a press release.
Some of the equity financing comes from financial partners outside the Middle East, including Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’imad Holding Company PJSC and the Qatar Investment Authority. Another part comes from Jared Kushner’s Affinity Partners. Kushner is the son-in-law of US President Donald Trump.
These partners agreed to “give up any governance rights,” including board seats, as part of their non-voting stock investment, according to a Paramount filing. The changes allow the deal to escape the jurisdiction of the Committee on Foreign Investment in the United States, or CFIUS.
Paramount shares gained 9% on Monday. Warner Bros. shares Discovery’s were up about 4% while Netflix’s were down 3%.
“We’re really here to finish what we started,” David Ellison, CEO of Paramount Skydance, told CNBC’s “Squawk on the Street” on Monday. “We’re putting the business on the line.”
Paramount Skydance has begun its hunt for Warner Bros. Discovery in September, submitting three offers before WBD launched a formal sales process that ultimately brought in other suitors.
On Friday, Netflix announced a deal to acquire WBD’s studios and streaming assets for a combination of cash and stock, valued at $27.75 per WBD share, or $72 billion. Paramount had made an offer for all of Warner Bros. Discovery, including these assets and the company’s television networks like CNN and TNT Sports.
“We’re on Wall Street, where cash is still king. We’re offering shareholders $17.6 billion more than the deal they currently have with Netflix, and we believe that when they see what’s currently in our offer, that’s what they’ll vote for,” Ellison said.
Ellison said Monday he places a $1 per share value on the linear cable assets, which are expected to trade as a separate public entity called Discovery Global in mid-2026. WBD executives have privately valued the assets at more than $3 per share.
Paramount has repeatedly argued to the WBD board that keeping Warner Bros. Discovery in its entirety was in the best interests of its shareholders.
Paramount made an offer Dec. 1 and WBD responded that it needed to make some changes to the offer, Ellison said Monday. When Paramount made the changes and increased its offer to $30 per share, Ellison never heard back from WBD CEO David Zaslav, he said.
Ellison said he told Zaslav via text message that $30 per share was not the company’s best and final offer, suggesting the company is willing to bid even higher.
Ellison argued that Paramount’s deal would require a shorter regulatory approval process given the company’s small size and friendly relationship with the Trump administration. He called Trump a believer “in competition” and said Paramount’s tie-up with WBD would be “a real competitor to Netflix, a real competitor to Amazon.”
Ellison also threw cold water on Netflix’s chances of regulatory approval.
“Allowing the No. 1 streaming service to combine with the No. 3 streaming service is anti-competitive,” Ellison said.
CNBC reported Friday that the Trump administration viewed the deal with “strong skepticism,” and Trump said Sunday that market share considerations could pose a “problem.”
Netflix agreed to pay $5.8 billion to Warner Bros. Discovery if the deal is not approved, according to a Securities and Exchange Commission filing Friday. Warner Bros. Discovery said it would pay a $2.8 billion dissolution fee if it decided to cancel the deal to pursue another merger.
Netflix, for its part, once again defended the deal as positive for shareholders, consumers and the media industry as a whole, when its top executives spoke Monday at the UBS Global Media and Communications Conference.
Co-CEO Greg Peters said he recognized the Netflix deal came as a shock, but called the studio Warner Bros. and HBO Max content complementary to Netflix’s activities.
Co-CEO Ted Sarandos said the acquisition would protect jobs at a time when layoffs are commonplace in the media: “In the offer that Paramount was talking about today, they were also talking about $6 billion in synergies. Where do you think the synergies are coming from? Job cuts. So we’re not cutting jobs, we’re creating jobs.”
— CNBC’s Lillian Rizzo contributed to this report.