UPDATE: Paramount CEO David Ellison has confirmed his company’s hostile bid for Warner Bros. Discovery (WBD) at $30 per share, amid escalating tensions following Netflix’s recent winning bid of $27.75 per share. Speaking at the UBS media event on Tuesday, July 25, 2023, Ellison expressed skepticism about the WBD board’s ability to accept this offer, highlighting a potential breach of fiduciary duty.
Ellison’s remarks come just days after WBD accepted Netflix’s bid for its studio and streaming assets, signaling a significant shift in the competitive landscape. Paramount’s move aims to acquire not just WBD’s assets but also its influential TV networks, including CNN and TNT.
Ellison stated, “If they accept the offer exactly as it is today, then they’re admitting breach of fiduciary duty.” This statement underscores the pressure on WBD’s board to act in the best interests of its shareholders while navigating the complexities of this hostile takeover attempt.
Paramount’s offer mirrors the bid presented to WBD privately just days earlier, with Ellison emphasizing, “We wanted to communicate to everyone: We didn’t change the offer.” This declaration positions Paramount’s bid as a direct challenge to WBD’s board, which is now faced with the dilemma of rejecting an offer they previously deemed insufficient.
In response to the hostile bid, WBD has pledged to “carefully review” Paramount’s offer in a manner consistent with its fiduciary responsibilities, consulting with independent financial and legal advisors. This critical review process could significantly impact the unfolding bidding war.
The urgency of this situation is palpable, as industry insiders speculate that Ellison may be willing to enhance his offer to secure a victory. An SEC filing revealed Ellison’s communication with WBD CEO David Zaslav, where he notably stated, “Please note importantly we did not include ‘best and final’ in our bid.” This suggests that there may still be room for negotiation.
Industry experts are weighing in, with Kevin Mayer, former Disney dealmaker, likening the current Paramount-Netflix face-off to the intense competition between Disney and Comcast for Fox’s assets. Mayer expressed confidence that a significantly improved offer from either Paramount or Netflix is on the horizon, stating, “I would be very surprised if we don’t see a sweetened, and perhaps meaningfully sweetened, offer.”
As the bidding war intensifies, stakeholders and shareholders alike are watching closely for the next developments in this high-stakes drama. With Paramount’s aggressive strategy and Netflix’s established foothold, the outcome of this battle will not only reshape the futures of these media giants but also have far-reaching implications across the entertainment industry.
Stay tuned for more updates as this story develops.
