David Ellison is not going away quietly in his quest to land Warner Bros. Discovery.
On Monday, Ellison’s Paramount Skydance announced it has commenced an all-cash tender offer to acquire all of the outstanding shares of WBD for $30 per share — the same terms it offered in its Dec. 1 bid submitted to the Warner Bros. Discovery’s board. Paramount’s proposed transaction is for the entirety of WBD, including the TV business with CNN, TBS, TNT and other networks.
Paramount’s announcement comes after Netflix and WBD revealed their binding agreement Friday under which Netflix would buy Warner Bros.’s studio operations and HBO Max for $72 billion (with an enterprise value of $82.7 billion).
According to Paramount, its all-cash offer equates to an enterprise value of $108.4 billion (including assumption of debt). In contrast, the Netflix proposal entails “a volatile and complex structure” valued at $27.75/share in a mix of cash ($23.25) and stock ($4.50), subject to collar and the future performance of Netflix, equating to an enterprise value of $82.7 billion (excluding the TV biz), per Paramount.
“Paramount’s strategically and financially compelling offer to WBD shareholders provides 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,” Paramount said in announcing the hostile takeover maneuver.
Reps for Warner Bros. Discovery and Netflix did not immediately respond to a request for comment.
Ellison, chairman and CEO of Paramount, said in a statement: “WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company. 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 said WBD shareholders can find additional information about Paramount’s proposal at http://www.strongerhollywood.com.
