Paramount Skydance is holding firm at its $30-per-share offer to shareholders to buy Warner Bros. Discovery and believes a majority will tender their shares despite the pressure to increase its bid for the legacy Hollywood studio, TheWrap has learned.
The furious, public bidding war to buy Warner continued on Wednesday as press leaks suggested that Warner shareholders were expecting a higher bid from Paramount, and one report suggested that Warner CEO David Zaslav would reopen the process if he were offered $35 per share.
But an individual close to the bidding said that the posturing would not result in an increased offer from Paramount Skydance. The individual said that the letter sent by Paramount CEO David Ellison directly to shareholders, making the case that his bid was worth more money, had solid financial backing and would pass regulatory scrutiny, was the company’s final position and was expected to yield the desired result.
“I would be shocked if shareholders didn’t support” the Paramount bid over Netflix, said this individual.
Paramount declined to comment for this story.
A Warner Discovery spokesperson told TheWrap that the board and company have run a “fair and transparent” process with each of the bidders for months, including “extensive opportunities for due diligence and negotiations.”
A Warner insider told TheWrap that Zaslav is not necessarily looking for $35 per share, and the Warner board was still assessing the Paramount tender offer.
The thinking at Paramount is that the case for the anti-trust argument against Netflix is clear-cut, and that the defense by the streamer that the true competition are the tech giants YouTube and TikTok, “is not legally defensible in any way,” according to the knowledgeable individual.
Creators like Taylor Sheridan or Jordan Peele cannot sell their material to YouTube, this individual argued.
Meanwhile GAMCO Investors chairman and Paramount shareholder Mario Gabelli told TheWrap he intended to tender his shares to Paramount on Wednesday, saying the all-cash, $30-per-share offer is “superior” for his clients, but added the battle with Netflix is still in the “early innings”
Gabelli’s statement is likely giving Paramount confidence that its direct appeal would convince other shareholders as well.
Beyond talking up the regulatory advantage Paramount had if it were to buy Warner, Ellison slammed Netflix’s $82.7 billion deal and called the financing for his own $108.4 billion bid “air-tight.” He also dismissed the idea that his deal would results in more job losses, a central argument presented by Netflix earlier this week.
“The suggestion that Paramount’s plan relies on deeper job cuts than Netflix’s is not supported by any facts,” he said in the letter.
The offer includes over $41 billion of equity and $54 billion in committed debt financing that is fully backstopped by the Ellison family, whose family trust has over $250 billion in Oracle stock and other assets, and RedBird Capital Partners. Approximately $17 billion is reserved to allow Warner Bros. Discovery to extend its existing bridge loan. Partners in the bid include Bank of America, Citibank, Apollo Global Management, Jared Kushner’s Affinity Partners and three Middle Eastern sovereign wealth funds.
Oracle billionaire Larry Ellison has a history of sticking to his offers in bidding wars, as he did when bidding for the Golden State Warriors in 2010, a bid he lost to investors Peter Guber and Joe Lacob for $450 million.
At the time, Ellison publicly stated he submitted a higher bid than his rivals, but the Warriors’ seller Chris Cohan went with the alternative saying the other bid was fully financed and ready to close immediately, which the league considered decisive.
At the time, Ellison’s claim of a higher offer came after the sale was finalized and was dismissed by the seller.
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