Netflix and Paramount are locked in a high-stakes battle for control of Warner Bros Discovery (WBD), with competing bids and regulatory scrutiny shaping the outcome. Netflix's revised $82.7 billion all-cash offer for WBD's film and television studios has gained traction, while Paramount's hostile $108 billion bid for the entire company faces skepticism from shareholders and regulators.
Immediate Action & Core Facts
1. Netflix's Revised Offer Gains Momentum
Netflix co-CEO Greg Peters stated that the company is on track to secure WBD shareholder support for its $82.7 billion offer, which was revised to an all-cash deal to expedite closure. Peters criticized Paramount's bid, calling it "doesn't pass the sniff test" and emphasizing the strength of Netflix's balance sheet. Less than 7% of WBD shares have been tendered in support of Paramount's offer, according to WBD.
2. Paramount Extends Deadline Amid Regulatory Concerns
Paramount extended its hostile tender offer deadline to February 20, following Netflix's revised offer. Paramount's bid, which includes $40 billion in equity personally guaranteed by Oracle co-founder Larry Ellison, faces uncertainty over European regulatory approval. The deal's outcome hinges on whether European regulators will approve the Netflix-WBD transaction, which excludes WBD's sports rights.
Deeper Dive & Context
Competing Bids and Shareholder Response
Netflix's all-cash offer aims to provide greater financial certainty to investors, contrasting with Paramount's debt-heavy bid. The WBD board rejected Paramount's amended offer, citing concerns over its feasibility without Ellison's financing. Meanwhile, Paramount's bid includes WBD's sports rights, which would not be part of the Netflix deal.
Regulatory and Market Implications
The future of WBD's assets—including HBO Max, CNN, and major sports rights—depends on regulatory approval. European regulators' stance on the Netflix-WBD deal could determine the outcome, as Paramount bets on potential disapproval. The deal's resolution will impact the media landscape, including the ownership of valuable sports broadcasting rights.
Key Stakeholders and Perspectives
Netflix's Position: Peters emphasized the strength of Netflix's balance sheet and the greater deal certainty of its offer. The company aims to acquire WBD's film and television studios, excluding cable networks and sports rights.
Paramount's Position: Paramount's bid includes the entire WBD company, including sports rights. The company extended its tender offer deadline to give shareholders more time to consider the bid, despite low initial support.
WBD's Response: WBD has rejected Paramount's bid and highlighted the low shareholder support for it. The company is backing Netflix's revised offer, which it views as more financially sound.
Regulatory Uncertainty: The outcome hinges on European regulators' approval of the Netflix-WBD deal. Paramount is betting that regulators may block the deal, leaving its bid as the only viable option.