Paramount launches all-out hostile takeover bid for Warner Bros. Discovery

Offering $30 a share to WBD shareholders, saying it’s the best option

It’s on.

After Netflix agreed to acquire Warner Bros. Discovery for $82.7 billion on Friday, Paramount Skydance on Monday announced a hostile takeover bid for the entire company with an all-cash offer of $30 a share to shareholders. The offer is being financed by hedge fund Apollo Global Management, banks Citi and Bank of America; and reportedly $24 billion from the wealth funds of Saudi Arabia, Qatar, and Abu Dhabi, plus President Donald Trump’s brother-in-law Jared Kushner’s Affinity Partners. 

Paramount Skydance CEO David Ellison appeared on CNBC Monday morning to plead his case: 

“We’re really here to finish what we started,” Ellison said. “We put the company in play. We’re sitting on Wall Street, where cash is still king. We are offering shareholders $17.6 billion more cash than the deal they currently have signed up with Netflix, and we believe when they see what it is currently in our offer, that’s what they’ll vote for.” Ellison said in the interview that he places a $1 value on Discovery’s cable networks, which would be spun off into a separate company, given the trend of cord-cutting. 

Paramount, Comcast, and Netflix all bid on WBD; Paramount was the only one to bid on the entire company. Paramount argues that it can deliver a better price for WBD and increase the chances of approval from federal regulators, as Ellison is a Trump ally. 

But on Monday, the President blasted Paramount officials for airing a 60 Minutes interview on CBS the previous evening featuring an interview with former Trump ally Rep. Majorie Taylor Greene from Georgia, stating the new Paramount owners were no better than the previous regime, referenced the settled lawsuit from CBS over a Kamala Harris interview, demanded an apology, and said 60 Minutes is actually worse. 

Trump, who expressed concern over Netflix acquiring WBD due to antitrust issues, says he will be involved in this decision – but isn’t taking a side for now and further stated on Monday that neither company “aren’t particularly great friends of mine.” When asked about his son-in-law”s involvement in Paramount’s hostile takeover bid, Trump claimed he hadn’t talked to him. 

This isn’t the first time Paramount has launched a takeover bid. In 1989, Paramount parent Gulf + Western launched a hostile takeover bid to buy Time Inc. shortly after they announced a stock-swap merger with Warner Communications, parent company of Warner Bros, with Time raising its bid to $14.9 billion, causing Gulf + Western to sue to block the transaction, losing in court twice. Four years later, Paramount was on the receiving end of the takeover bid battle after the company was purchased by Viacom, but had to fend off an attempt by home shopping network QVC, led by former Fox executive Barry Diller, which lasted five months before he conceded in February 1994. 

In 1985, Atlanta-based media mogul Ted Turner announced a hostile takeover bid against CBS, leading the network to sell its St. Louis TV station (KMOX-TV) to Viacom (the same company it spun off of in 1971) and letting Loew’s (not the hardware chain) chairman Laurence Tisch buy a large portion of CBS shares. Just two weeks ago, Sinclair launched a hostile takeover of Scripps, but was thwarted (for now) after Scripps adopted a “poison pill” provision.

WBD has ten days to respond to Paramount’s tender offer, as it remains open for twenty business days. When that time is up, Paramount can extend the deadline to accommodate WBD shareholders. If those shareholders sell enough shares to Paramount during this time to reach the 51 percent threshold, they would win the bidding war and control WBD. Like what happened when Time raised its offer to buy Warner, Netflix could do the same. 

Like the Time-Paramount and Paramount-QVC battles before it, the WBD-Netflix-Paramount tussle will likely be lengthy and end up in a Delaware court. But given the poor track record of hostile takeovers in media, Paramount would face a tough road ahead in acquiring Warner Bros. Discovery. However, this is no ordinary business deal, and with Trump involved in the process, as his mind can easily change as quickly as Chicago’s weather, anything can happen.