Warner Bros. Discovery () stated that the new offer from Paramount Skydance is a better deal for shareholders than the previously reached deal with Netflix ().
The decision means that Netflix will now have four working days to present a new proposal that surpasses Paramount’s or it will lose the race for one of the industry’s most traditional film and TV studios. Paramount offered $31 per share for the entire company.
Paramount CEO David Ellison has been pursuing Warner Bros. months ago, an effort that led to the company putting itself up for sale in October. After Warner Bros. signed a deal in early December to sell its studios and HBO Max streaming business to Netflix for $27.75 per share, Paramount kept up the pressure.
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Ellison, backed by his father Larry, the billionaire co-founder of Oracle (), launched a hostile tender offer, threatened a proxy fight, and repeatedly adjusted his proposal, ultimately agreeing to pay billions of dollars more.
Warner Bros. is the parent company of HBO, CNN and other major media companies.
The move by Ellison, 43, comes on the heels of his $8 billion acquisition of Paramount, owner of CBS and MTV, completed in August. If the deal goes ahead as planned, it would mark the biggest consolidation in Hollywood since Walt Disney () bought most of Fox’s entertainment business for $71 billion in 2019.
Studios such as Paramount and Warner have been under pressure to consolidate, affected by the drop in revenue from traditional media services, such as cable TV and cinemas. After spending heavily to build streaming services, studios have scaled back production and cut jobs to try to make these newer operations profitable.
Warner Bros. said in October that it was evaluating all options after receiving unsolicited expressions of interest from several parties. Paramount Skydance, Netflix and Comcast () were among those interested in acquiring all or part of Warner Bros.
The dispute heated up, with Paramount accusing Warner Bros. of conducting an unfair process that favored Netflix.
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The deal will unite major film and TV production studios, competing streaming services and two of the largest cable TV network owners. This will certainly attract regulatory scrutiny from antitrust authorities.
Paramount is the producer of the films “Mission: Impossible” and “Transformers”, as well as the series “Yellowstone” and “Star Trek”. The Warner Bros. catalog includes the “Harry Potter” films, “Batman”, classics such as “Casablanca”, as well as “The Sopranos”, from HBO.
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