GAMCO Investors chairman Mario Gabelli is calling on Netflix to simplify its $83 billion deal for Warner Bros. Discovery as Paramount escalated its fight for the company with a lawsuit filed in the Delaware Court of Chancery.
“This is pretty standard. You defend, you attack. This is an attack based on the notion that they were not giving you all of the information,” Gabelli told TheWrap in an interview on Monday. “It’s got to get Netflix to step up and clarify their deal. At the moment, [Paramount is] saying, ‘show me what you did and then I’ll determine what I have to do’.”
“The game is as follows: Step one, Netflix simplify [the deal structure]. All or more cash. Step two, once they do that, Paramount goes in and shows one of the other cards in their deck,” he continued. “No point in [raising its bid] at the moment. Right now, they’re trying to dig into the board of Warner Bros. to say, ‘I’ve got a better bid. Show me why you don’t think it’s there. What are you really you guys are thinking about?’”
Gabelli previously told TheWrap he’s “highly likely” to tender his clients’ shares to Paramount Skydance. Bloomberg has estimated that Gabelli’s clients own nearly 5.7 million shares in Warner Bros. Discovery.
On Monday, he clarified he’d likely tender a portion of that total, though the firm has the right to withdraw at any time before the tender expires at 5 p.m.ET Jan. 21, barring no extension.
“We are going to hold back a little bit for what we think will be some cash liquidity, because we just like to rebalance. That’s all OK. If somebody has 4.8% or 5.2% in a portfolio, we may trim somewhere,” he explained. ” So they’ll probably still get about 5 million plus shares, not the entire 5.6 million.”
Despite Paramount’s difficulty in proving its case to the WBD board, Gabelli believes the $30 per share, all-cash deal is “superior” when compared to Netflix’s cash-and-stock deal and the regulatory hurdles associated with it. The streamer has said its deal would take 12-to-18 months to close, while Paramount has said its bid would close within a year.
Shares of Warner Bros. Discovery closed down 1.68% at $28.40 per share as of Monday’s close, while Netflix stock was down 0.05%, finishing at $89.42 apiece.
The post Mario Gabelli Urges Netflix to ‘Step Up and Clarify’ $83 Billion Warner Bros. Deal as Paramount Takes Battle to Court appeared first on TheWrap.
