Some Warner Bros. Discovery shareholders are betting that Paramount could up the ante on its quest to take over the company after recently going directly to investors with an all-cash $30-per-share offer.
On Tuesday, Paramount CEO David Ellison, chief legal officer Makan Delrahim and chief strategy officer Andy Gordon held meetings with WBD shareholders in New York City as they look to garner support for their tender offer. The Wall Street Journal reports that “multiple attendees came away from the meeting with the view that a higher bid from Paramount was more than likely.”
Among the meeting’s attendees was GAMCO Investors chairman Mario Gabelli, who told TheWrap it’s “highly likely” that he will tender his clients shares to Paramount, though he acknowledged the battle with Netflix is still in the “early innings.”
Another investor told WSJ that they expect Netflix to increase their bid to counter Paramount, though Morningstar Research analyst Matthew Dolgin believes that Netflix getting into a bidding war at current prices would be a “mistake.”
“Both suitors are offering much more than we believe Warner is worth independently, but we think it’s more likely that Paramount’s shareholders would benefit from a combination than Netflix’s,” Dolgin added in a note to clients.
Ellison has submitted a total of six bids over twelve weeks for all of Warner Bros. Discovery. During a call with analysts on Monday, he emphasized that the $30 per share offer was not his “best and final.”
Paramount’s tender offer will be open for 20 business days, or until Jan. 8, and Warner Bros Discovery’s board will need to respond within 10 business days, or by Dec. 22. Paramount also has the option to extend the tender offer. Under the terms, shareholders have withdrawal rights that expire at 5 p.m. ET on Jan. 8. Those rights would be extended if Paramount extends the tender offer.
The New York Post’s Charlie Gasparino reports that Warner Bros. Discovery CEO David Zaslav is hoping for a $35 per share offer from Paramount to justify pivoting from its $82.7 billion deal with Netflix. Representatives for Warner Bros. Discovery and Paramount did not immediately return TheWrap’s request for comment on the Post’s report.
Shares of Warner Bros. Discovery are up 4.6%, trading at $29.57 per share as of Wednesday afternoon. Paramount stock is up 1.4% at $14.86 apiece, while Netflix is down 2.8% at $93.95 apiece.
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