It wasn’t even two weeks ago that the news pages walloped us all with word that Netflix had acquired Warner Bros., including HBO and Discovery, in a $72 billion deal. It was as if two Greek Titans had eloped and, oh yeah, one of them was pregnant with the mondo offspring sure to come, an even bigger Titan to dwarf all others.
People panicked. Many lamented. Paramount, itself a Titan that battled Warner Bros. for generations in Hollywood, launched a hostile bid that vastly outstripped Netflix’s offer: $108 billion. And what do you know, Warner Bros. rejected it, saying that Netflix’s deal, although about 30 percent less, is superior.
Warner Bros. Board Pushes Back on Paramount Takeover as Netflix Decision Looms
Netflix’s offer was welcomed with open arms by the Warner Bros. board in early December.
“Under the deal, each Warner Bros Discovery shareholder will receive $23.25 in cash and about $4.50 in Netflix stock per share, valuing Warner at $27.75 a share, or about $72 billion in equity and $82.7 billion including debt,” as reported by Reuters.
Warner Bros.’ board publicly released a letter to its shareholders, urging them to reject the Paramount offer. “The terms of the Netflix merger are superior,” it says. “The PSKY (Paramount Skydance, the full name of the company) offer provides inadequate value and imposes numerous, significant risks and costs on WBD (Warner Bros. Discover).”
Part of the urging comes from a disagreement over how much the financially powerful Ellison family. David Ellison is chairman and CEO of Paramount, and his father, Larry Ellison, co-founded Oracle.
“PSKY has consistently misled WBD shareholders that its proposed transaction has a ‘full backstop’ from the Ellison family,” continues the statement. “It does not, and never has.” Warner Bros. lays out all its reasons, which you should check out in full here.
The Warner Bros. board makes a lot of clatter in denying Paramount, but it’s the Warner Bros. shareholders who can ultimately say yes or no to the Paramount offer. The drama hasn’t ended. Like a Golden Age Hollywood domestic drama, we’re just entering act two.
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