Warner Bros. Discovery (WBD) will recommend its shareholders reject the $30 per share and instead back the , according to sources familiar with the matter.
In this way, Paramount and its CEO, David Ellison, will have to decide whether to increase their purchase proposal. Warner shares are trading slightly below $30, suggesting investors expect an increase in supply. Paramount says its bid offers a clearer path to regulatory approval. A spokesman for Warner Bros. Discovery declined to comment.
Paramount and Netflix, two giants of the American audiovisual industry, are facing each other in the attempt to acquire the emblematic film and television company, with a huge catalog that includes all the DC Comics sagas (Batman or Superman) and HBO productions. WBD reached an agreement with Netflix to sell the company for $82.7 billion, including debt, after which Paramount entered the scene with a hostile takeover bid for $108 billion. Netflix had agreed to pay $27.75 per share, in a combination of cash and stock, for Warner studios and the streaming service. streaming HBO Max.
Paramount, for its part, offered $30 in cash for the entire company. Paramount’s offer expires on January 8, the date until which the company could decide whether to raise its proposal.
In regulatory filings, Paramount has stated that its offer is superior to Netflix’s. Its offering is funded with $41 billion in new capital, backed by the Ellison family and RedBird Capital, and $54 billion in debt commitments from Bank of America, Citi and Apollo. Jared Kushner’s Affinity Partners, one of Paramount’s financial partners, is withdrawing from the race, according to Bloomberg.
The winner will get a huge advantage in the war of the streaming by securing an extensive library of content that has long been an object of desire. in a sector already dominated in the United States by a handful of large groups that bring together film, media, television and streaming.
On the other hand, the Writers Guild of America (WGA) denounced that the operation could violate antitrust laws, and senators such as Elizabeth Warren, Bernie Sanders and Richard Blumenthal have warned the Department of Justice that the new company would have “the ability to increase television prices in a context of inflation.”
