Paramount Skydance launched a hostile bid to acquire Warner Bros. Discovery on Monday, valued at $108.4 billion. This move comes just days after Warner Bros. Discovery agreed to be acquired by Netflix in a deal valued at $82.7 billion.
Paramount is taking its offer directly to Warner Bros. Discovery shareholders with an all-cash tender of $30 per share. The company notes its proposal provides shareholders $18 billion more in cash than the Netflix agreement, which offered $23.25 in cash and $4.50 in Netflix shares for a total of $27.75 per share. Furthermore, Paramount is bidding for the entire company, while Netflix’s deal only includes the Hollywood studios and streaming business.
Reports indicate these were the same terms from Paramount that the Warner Bros. Discovery board rejected a week ago. In a statement, Paramount CEO David Ellison criticized the board for pursuing an inferior proposal that exposes shareholders to a mix of cash and stock, the uncertain future value of the linear cable business, and a challenging regulatory approval process.
Paramount’s offer is supported with equity financing from the Ellison family and the private-equity firm RedBird Capital, along with $54 billion in debt commitments from Bank of America, Citi, and Apollo.
While Netflix emerged victorious last Friday after a bidding war against Paramount and Comcast, this hostile bid is set to prolong the battle for one of Hollywood’s most iconic studios, a contest that has already stretched on for months.
Netflix’s proposed deal has already raised antitrust questions, as it would combine two of the most popular streaming platforms. Former President Donald Trump has commented that the deal could be a problem due to the size of the combined companies’ market share. A potential deal between Warner Bros. Discovery and Paramount would likely face similar regulatory scrutiny.
The agreement between Netflix and Warner Bros. Discovery includes breakup fees. Netflix would pay Warner Bros. Discovery $5.8 billion if the deal fails, while Warner Bros. Discovery would owe Netflix $2.8 billion if it collapses. Netflix did not immediately respond to a request for comment regarding the new bid.