Warner Bros Likely to Reject $108bn Paramount Takeover Bid
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A new report published by the BBC earlier today, December 17, said that Warner Bros is likely ot reject a recent $108 billion Paramount bid.
Paramount Offers To Buy Warner Bros
Paramount sent a letter to Warner Bros. Discovery shareholders about a week ago, on December 10, explaining its intention to acquire all of WBD. The letter said:
“Paramount began pursuing Warner Bros. Discovery (“WBD”) because we, along with our partner RedBird Capital, believe we are the best stewards not only to build long-term value for the asset but also delight audiences and help cultivate a more vibrant creative community.“
The letter also said that in the 12 weeks prior, Paramount presented six proposals to the WBD Board of Directors and management to acquire all of WBD, and on Monday, December 8, they launched a $30.00 per share all-cash tender offer to present their superior transaction to shareholders directly.
The company insisted that its offer is financially superior to Netflix’s transaction, which provides WBD shareholders with “lower value, less cash, and significantly less certainty,” as the letter had put it.
However, according to the BBC, WBD is likely to urge shareholders to reject Paramount’s $108.4 billion takeover bid. So far, Warner Bros has declined to comment, but the BBC report suggests that the firm is against Paramount’s offer for multiple reasons, including concerns about how the deal would be financed.
Warner Bros Agrees To Sell To Netflix, But Paramount Is Not Giving Up
Originally, the media giant put itself up for sale in October of this year, after receiving multiple expressions of interest from several potential buyers, Paramount Skydance included. However, on December 5, WBD said it had agreed to sell its film and streaming business to Netflix.
Since then, Paramount has intensified its efforts to change this decision, mainly by launching a new offer to buy the entire company, including its television networks.
It is also worth noting that a takeover of Warner Bros is expected to face significant scrutiny from competition regulators in both the US and Europe. However, whoever ends up being the new owner would gain a significant edge in the streaming market, not to mention a massive library of films, TV shows, and other IPs, as well as the entire HBO Max streaming service.
Many in the industry have already criticised the decision to merge all, or even a part of Warner Bros, with a rival, and The Writers Guild of America’s East and West branches even called for the merger to be blocked, saying that going through with it would lead to lower wages and job cuts.
