- Paramount Skydance got outbid by Netflix for Warner Bros. Discovery's streaming and studio assets.
- David Ellison's company has now launched a hostile bid for the WBD.
- The Netflix-Warner Bros. mega-merger is the largest in years and would upend Hollywood.
Paramount Skydance isn't ready to give up the fight for Warner Bros. Discovery.
The David Ellison-run company just launched a $30 per share offer for all of WBD, even though Netflix agreed to buy WBD's streaming and studio assets last week in a $82.7 billion deal that includes $72 billion in equity. Netflix's offer was valued at $27.75 per WBD share and did not include WBD's TV networks, such as CNN.
"Paramount's strategically and financially compelling offer to WBD shareholders provides a superior alternative to the Netflix transaction," Paramount said in a statement on Monday morning.
Netflix's offer to buy Warner Bros. and HBO "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," the Paramount statement continued.
Even before Paramount's hostile bid, the Netflix-Warner Bros. tie-up wasn't a lock, as it needs approval from regulators in the US and abroad.
"The Warner Bros Discovery acquisition is far from over," said Ross Benes, a senior analyst at EMARKETER, Business Insider's sister company. "Netflix is in the driver's seat but there will be twists and turns before the finish line. Paramount will appeal to shareholders, regulators, and politicians to try to stymie Netflix. The battle could become prolonged."
Paramount's lawyers sent a letter saying that "WBD appears to have abandoned the semblance and reality of a fair transaction process," CNBC reported on Thursday. That was the first sign that Ellison and company would make a pitch to WBD shareholders directly.
Paramount Skydance controls film studio Paramount Pictures, streamers Paramount+ and Pluto TV, broadcast network CBS, and cable channels like Comedy Central and MTV.
Warner Bros. Discovery owns the Warner Bros. film studio, HBO, HBO Max, and TV networks like CNN, TNT, and TruTV.
WBD stock was up over 6% on Monday morning, and Paramount's was up about 3%. Netflix stock was down about 3%.
Paramount has big ambitions with WBD
Paramount has already made major moves since its merger with Skydance, the production company founded by Ellison, finalized in August. The combined unit has since made a splash by buying UFC rights in the US, and by hiring former Netflix executives and the Duffer brothers, who created "Stranger Things." It also bought Bari Weiss' news startup, The Free Press, for $150 million and made her the editor in chief of CBS News.
A Paramount-WBD merger would combine two legacy Hollywood movie studios and pair Paramount+ with HBO Max, creating a streaming powerhouse capable of challenging Netflix, Disney, and Google's YouTube in the battle for engagement.
Although this deal requires regulatory approval from the US and foreign governments, some media insiders say Ellison's apparent rapport with Trump could make the process less painful.
Conventional antitrust analysis would focus on how Paramount's buying WBD would impact both consumer prices and the entertainment industry's labor market.
Entertainment lawyer Corey Martin of Granderson Des Rochers in Los Angeles previously told Business Insider that the normal state of play was "out the window," given how the Trump administration values personal relationships. Trump has publicly praised the Paramount CEO, whose father, Larry Ellison, is a longtime ally of the president.
Trump commented on the Netflix offer on Sunday, saying the streamer had done a "phenomenal job" but had a "very big market share."
"So I don't know, that's going to be for some economists to tell," he said. "And also, I'll be involved in that decision, too."
This story is developing. Please check back for updates.
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