Paramount’s Skydance Extends Deadline for David Ellison’s Warner Bros. Takeover Bid

Rowan Ashford

ago 2 hours

Paramount’s Skydance Extends Deadline for David Ellison’s Warner Bros. Takeover Bid

Paramount Skydance is intensifying its efforts to secure support from Warner Bros. Discovery (WBD) shareholders for its acquisition bid. David Ellison’s company has extended the deadline for its all-cash offer of $30 per share until February 20. This move comes after the previous tender offer expired on January 21.

Context of the Acquisition Bid

Paramount is attempting to disrupt Netflix’s deal to acquire Warner Bros. The company filed preliminary proxy materials with the SEC, urging WBD shareholders to oppose Netflix’s amended transaction at a special meeting scheduled for April.

Valuation Claims

Paramount maintains that its offer, valuing WBD at $108.4 billion, is “significantly greater and far more certain” than Netflix’s proposed $82.7 billion enterprise deal. They pressed WBD shareholders to accept their superior offer.

In response, WBD disclosed that over 93% of its shareholders have rejected Paramount’s proposal. The WBD board reiterated its preference for Netflix’s offer, which has been accepted unanimously multiple times.

Netflix’s Counter-Offer

Netflix recently enhanced its bid by transitioning to an all-cash offer of $83 billion. This adjustment aims to counter criticisms of its prior cash-and-stock proposal. The acquisition is projected to finalize within 12-18 months, pending regulatory approvals and shareholder consent.

Strategic Implications

WBD’s planned spin-off of Discovery Global is integral to the deal, including popular channels like CNN and HGTV. However, Paramount questions the valuation WBD places on this spin-off, suggesting it may undervalue potential shareholder returns.

Discovery Global Spin-off: WBD plans to spin off Discovery Global, which includes various cable networks.
Debt Considerations: WBD’s anticipated net debt for Discovery Global is $17 billion, affecting shareholder payouts.
Current Offers: Paramount’s offer remains at $30 per share, while Netflix’s latest is $27.75.

Ongoing Legal and Financial Disputes

Paramount has initiated legal proceedings against WBD to secure more financial information about Discovery Global. They assert that certain valuations need to be disclosed for shareholders to make informed decisions.

Regulatory Challenges Ahead

Paramount argues that Netflix’s acquisition poses regulatory hurdles, particularly in Europe, citing market dominance concerns. They warn that this merger could affect consumer prices and content creation dynamics negatively.

Despite these challenges, Netflix representatives express confidence in achieving the necessary approvals. The company emphasizes that its acquisition will promote consumer growth and innovation.