Paramount Extends Warner Bros. Discovery Shareholders’ Deadline for Hostile Bid Support
Paramount has announced an extension for Warner Bros. Discovery (WBD) shareholders to support its hostile takeover bid. The original deadline, initially set for Wednesday, has now been pushed to February 20, according to a recent SEC filing.
Overview of the Hostile Takeover Bid
CEO David Ellison and his senior executive team have been actively engaging with WBD investors to promote Paramount’s offer. They aim to persuade shareholders to tender their shares in favor of Paramount’s proposal.
Proxy Fight and Board Elections
Paramount intends to initiate a proxy fight to elect board members aligned with its takeover bid. The filing on Thursday marks the beginning of this effort.
Context of the Acquisition Effort
- In December, Netflix and WBD announced an $82.7 billion deal for Netflix to acquire WBD’s studios and streaming division.
- Shortly after, Paramount made its move, labeling its offer worth $108.4 billion as superior to Netflix’s deal.
Comparative Analysis of Offers
Paramount proposes a $30-per-share offer, which its executives believe is more likely to gain regulatory approval and provide greater benefits to shareholders. In contrast, Netflix’s deal could result in WBD shareholders receiving a “stub” consisting of Discovery Global, which controls traditional TV networks.
Market Reactions and Concerns
Netflix’s stock has experienced a decline of approximately 30% since news of the deal broke last fall. Analysts are concerned that this merger could result in distractions for Netflix over the next couple of years.
Legal Actions and Information Requests
As part of its strategy, Paramount has also filed a lawsuit in Delaware Chancery Court. This lawsuit aims to compel WBD to disclose additional information essential for its shareholders.
Significance of the Takeover Battle
The outcome of this high-stakes takeover contest is expected to significantly reshape Hollywood. Paramount’s bid could alter ownership of Warner’s valuable assets, including its film and TV studios and HBO.
Potential for Offer Adjustments
In response to concerns raised by WBD’s board, billionaire Larry Ellison agreed to personally guarantee a portion of the Paramount offer. This development raises speculation about whether Paramount might increase its offer if needed, and how Netflix would react in that scenario.
Conclusion
As the takeover battle unfolds, all eyes are on Paramount and its strategic maneuvers, signaling a pivotal moment for WBD and the broader entertainment landscape.
