Warner Bros. Discovery has urged its shareholders to reject Paramount’s hostile takeover offer valued at about $108 billion. The company stated that the proposal carries a high risk and does not provide adequate certainty compared to its existing agreement with Netflix.
Concerns Over Financing
In its letter, Warner Bros. Discovery raised concerns about Paramount’s claim that the offer is supported by the Ellison family fortune. Larry Ellison, father of Paramount chief executive David Ellison, is listed as a financial backer of the deal.
The board stated, “PSKY’s most recent proposal includes a $40.65 billion equity commitment, for which there is no Ellison family commitment of any kind.” It added that the proposed funding relies on “an unknown and opaque revocable trust” that could expose shareholders to risk.
Regulatory and Deal Uncertainty
Warner Bros. Discovery said Paramount’s offer allows changes to key terms, including the offer price, during the regulatory approval process. The board noted that global approvals could take between 12 and 18 months, creating uncertainty.
The letter described the proposal as “illusory”, stating that it guarantees Paramount “the right to amend the offer in any respect (including amending the offer price).” The board added that “nothing in this structure offers WBD any deal certainty” during the extended approval timeline.
The board also questioned Paramount’s plan to achieve $9 billion in cost savings through its Skydance merger and a proposed takeover of Warner Bros. Discovery. In its letter, the board said the target is “both ambitious from an operational perspective and would make Hollywood weaker, not stronger,” adding that the level of consolidation required could harm film and television production.
Netflix Deal Reaffirmed
Warner Bros. Discovery reaffirmed its support for the previously accepted $82.7 billion offer from Netflix. The deal involves Netflix acquiring the company’s studios and streaming assets following a planned corporate split.
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