The fight to take over legendary film studio Warner Bros. Discovery (WBD) is poised to become a landmark corporate battle. Paramount Skydance, led by David Ellison, on Monday launched a hostile takeover bid (takeover bid) for Warner Bros., owner of networks such as CNN, TBS and HGTV, as well as streaming service HBO Max for $108.4 billion, the equivalent of around 93.25 billion euros.
The proposal comes three days after Netflix reached a deal on Friday to acquire WBD Studios, in a deal that would include HBO Max for about $83 billion, the equivalent of about $72 billion in equity, excluding debt.
Paramount submitted an all-cash offer that was $30 per share higher than Netflix ($27.75). This is a proposal similar to the one that Warner’s board rejected last week. The market received Paramount’s offer with suspicion. Warner shares rose 8% after learning of the deal, settling at $28.16 per share, below the $30 offered.
If Paramount’s offer is higher, it is also because it is, on the one hand, bigger than the pie. The group chaired by David Ellison seeks to take over the entire WBD group, while the Netflix deal concerns the film studios and their television assets. streaming HBO Max, with its entire catalog of series and films.
Hostile takeover bids are long and costly, like the one launched in Spain by BBVA on Sabadell, which ended in failure. Despite this, Paramount’s operation is risky due to its size compared to Netflix. The empire created by David Ellison has a stock market value of around $15 billion, compared to $412 billion for its rival.
Furthermore, after last week’s agreement, legal conditions already exist. If Warner breaks the pact, it will have to pay Netflix a commission of $2.8 billion. If, on the other hand, Netflix is responsible for the failure of the operation or does not obtain regulatory approval, it will have to pay $5.8 billion to WBD.
The battle to acquire Warner will be fierce and have many political implications. If Paramount succeeds in taking over the Warner conglomerate, it will also add to its information portfolio the news channel CNN, in which it already owns CBS, and will pose a risk to the independence and objectivity of two major American media outlets, due to the docility of Paramount’s owners Skydance to pressure from Donald Trump.
Paramount Skydance is owned by David Ellison, a mediocre actor and successful Hollywood producer, who built an empire in just one year thanks to his father, Larry Ellison, the second richest person in the world thanks to the shares of his company Oracle.
David Ellison is the founder of Skydance, a successful film and television production company, but small compared to other industry giants. With the support of his father, he managed to finalize the $8 billion takeover of Paramount last July to create an audiovisual giant with channels such as CBS, MTV, Nickelodeon and Comedy Central.
The operation received the approval of United States President Donald Trump, who has a smooth relationship with the Ellisons, and confirmed the right-wing of mainstream media thanks to the Republican president’s influence.
The Ellisons have become one of the world’s most prominent media moguls, heading a media conglomerate, entertainment platforms and the Hollywood broadcast industry.
Netflix, however, has received persistent attacks from the conservative MAGA (Make American Great Again) world, which supports Trump. Elon Musk, one of the figures close to the president, constantly criticizes the company based in Los Gatos, California.
“The offering is strategically and financially attractive to Warner Bros. shareholders and provides a superior alternative to Netflix, which offers lower and uncertain value and exposes WBD shareholders to a lengthy, multi-jurisdictional regulatory approval process with an uncertain outcome as well as a complex and volatile mix of capital and liquidity,” Paramount said in a statement.
Paramount has accused Warner’s board of failing to listen to six proposals presented to it over the past 12 weeks.
“The offer for all of WBD offers shareholders $18 billion more in cash than Netflix’s proposal,” Paramount insists in a press release. David Ellison, Chairman of Paramount Skydance, emphasizes: “WBD shareholders deserve the opportunity to consider our excellent cash offer for their shares of the entire company. Our public offering provides superior value and a safer and faster closing process.” Although he does not say it expressly, Ellison asserts that the competition authorities, dependent on the White House, will put more obstacles to Netflix’s offer than to his proposal.
“We believe the WBD board is seeking an inferior proposal that exposes shareholders to a combination of cash and stock, uncertain future business value of Global Networks’ linear cable business, and a complex regulatory approval process,” adds Ellison.
Paramount’s decision to take its offer directly to Warner shareholders could lead to a public and complicated battle over the future of coveted Warner assets such as HBO, Harry Potter and DC Comics.
Paramount Skydance’s bid is backed 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, according to CNBC.
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