Paramount triggers takeover battle for Warner Bros with £81.3bn hostile bid
Paramount has launched a hostile bid for Warner Bros Discovery in an attempt to derail the firm’s agreed $72bn (£54bn) deal with Netflix.
Paramount said it was offering 30 dollars (£22.50) a share in cash for the whole of Warner Bros and would take the bid straight to investors, asking them to reject the deal with Netflix.
Paramount’s offer values Warner Bros at $108.4bn (£81.3bn) including debts, trumping Netflix’s 27.75 dollars (£20.81) per share offer, which values Warner Bros at $72bn (£54bn), or $82.7bn dollars (£62bn) including debts.
US streaming giant Netflix said last Friday it had agreed to buy the Warner Bros Discovery film and TV studios business in a move that could dramatically reshape the established Hollywood film and TV industry.
It followed an auction process which saw Paramount and Sky owner Comcast lose out to Netflix, which owns HBO, streaming service HBO Max and franchises such as Harry Potter and Batman.
But US President Donald Trump said on Sunday the Netflix takeover of Warner Bros “could be a problem” because of its combined market share.
Mr Trump confirmed he would be involved in the decision about whether the US federal government should approve the takeover.
David Ellison, chairman and chief executive of Paramount, said investors in Warner Bros “deserve an opportunity” to consider the firm’s offer.
He said: “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 Warner Bros 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 maximise the value of their shares.”
Paramount said it made six takeover approaches to Warner Bros over 12 weeks, but claimed that Warner Bros “never engaged meaningfully”.
Mr Ellison added: “We believe our offer will create a stronger Hollywood.
“It is in the best interests of the creative community, consumers and the movie theatre industry.”
Netflix has said its agreed takeover would close after Warner Bros Discovery completes a proposed spin-off of its cable channels, which include CNN, TBS and TNT Sports in the UK. As a result, the process is not expected to complete until at least the third quarter of next year.