Paramount tries to kill Netflix Warner Bros. deal

David Ellison's Paramount launches hostile takeover bid for WB

Paramount has launched its own bid to take over Warner Bros. Discovery, and kill a proposed buyout from Netflix, with an all-cash offer worth an estimated $108.4 billion. Unlike Netflix's $82.7 billion plan to acquire Warner Bros., Paramount wants all of WBD, including its global networks division, which includes channels like CNN, TBS, and TNT.

In a news release, Paramount called its proposed deal to snatch up Warner Bros. "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." From a cash perspective, Paramount's offers for Warner Bros. Discovery "provides shareholders $18 billion more in cash than the Netflix consideration."

"WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company," David Ellison, chairman and CEO of Paramount, said in a statement. "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."

Paramount's bid is backed by the Ellison Family — David's billionaire dad Larry Ellison is the founder and CTO of Oracle — and RedBird Capital, with debt committed by Bank of America, Citi, and Apollo Global Management.

Prior to the announced Netflix deal, Paramount lawyers alleged unfairness in Warner Bros. Discovery's process of receiving bids for the company, writing "It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favors a single bidder." Meaning: Netflix.

In Monday's announcement, Paramount said it sent WBD six proposals to acquire the company, but that WBD "never engaged meaningfully with these proposals which we believe deliver the best outcome for WBD shareholders."

"We believe our offer will create a stronger Hollywood," Ellison said in a statement. "It is in the best interests of the creative community, consumers, and the movie theater industry. We believe they will benefit from the enhanced competition, higher content spend and theatrical release output, and a greater number of movies in theaters as a result of our proposed transaction. We look forward to working to expeditiously deliver this opportunity so that all stakeholders can begin to capitalize on the benefits of the combined company."

Paramount isn't the only entity contesting the Netflix-Warner Bros. deal. On Friday, SAG-AFTRA, the union that represents actors, singers, and other creatives in Hollywood, expressed concerns about the deal, writing, "The potential Netflix/Warner Bros transaction is a consolidation that may serve the financial interests of shareholders of both companies, but which raises many serious questions about its impact on the future of the entertainment industry, and especially the human creative talent whose livelihoods and careers depend on it."

"There's no question it could be a problem," said President Trump on Sunday, telling reporters that he'll be "involved in the deal," according to Reuters. Trump is close allies with Larry Ellison, and Paramount recently capitulated to Trump's request for a new entry in the Rush Hour movie franchise, reportedly a favorite franchise of the president. That said, on Dec. 8 the president also took aim at Ellison's Paramount after an interview with Rep. Marjorie Taylor Green aired on 60 Minutes, posting on social media, "They are no better than the old leadership."