Paramount Skydance moves against Netflix and what it all means for the streaming and theatrical industries.
Paramount Skydance won’t go down without a fight as the newly merged corporation makes its move to purchase Warner Bros. Discovery, which would leave Netflix out in the cold. According to a brand-new report published by Deadline, Paramount is moving forward in an attempt to scoop up all the outstanding shares of the media conglomerate at a cost of $108.4 billion ($30 per share). This is an aggressive response to Netflix entering “into a definitive agreement under which [the streaming giant] will acquire Warner Bros., including its film and television studios, HBO Max and HBO.” Today, (Monday, Dec. 8) Paramount had this to say on the matter:
“The Paramount offer for the entirety of WBD provides shareholders $18 billion more in cash than the Netflix consideration. WBD’s Board of Directors recommendation of the Netflix transaction over Paramount’s offer is based on an illusory prospective valuation of Global Networks that is unsupported by the business fundamentals. Paramount’s strategically and financially compelling offer to WBD shareholders provides a superior alternative to the Netflix transaction, which 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.”
Netflix’s price for Warner Bros. Discovery came in at just under $83 billion ($82.7 billion) at $27.75 per share for an equity value of $72 billion. However, the CEO of the Paramount Skydance Corporation, David Ellison, isn’t going to stand idly by and do nothing as evidenced by this hostile takeover ploy. Ellison said:
“WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company. 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.”
Ellison added:
“We believe the WBD 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 maximize the value of their shares.” (Continued...)