It looks like Netflix has once again had its path cleared to take over Warner Bros. Discovery after the company’s board of directors has rejected the hostile takeover bid from Paramount Skydance’s David Ellison. It was reported last week that Ellison had attempted to push Netflix out of the equation with a huge deal worth a reported $108.4 billion, but it seems that the WDB board has decided that Paramount’s offer doesn’t amount to what they claimed.
Paramount came in hard with their offer, promising not only $30 a share but also a smoother and quicker overall transaction that Netflix can provide, along with a commitment to theatrical releases that has been a big bone of contention with the Netflix bid. The company’s board of directors has now officially rejected Paramount’s bid, citing “numerous significant risks and costs on WBD.” A letter sent to shareholders (per the LA Times) states that Paramount has “consistently misled WBD shareholders that its proposed transaction has a ‘full backstop’ from the Ellison family.”
In his own statement, Ted Sarandos is once again hailing a victory for the streamer, calling Netflix’s proposal as being “in the best interests of shareholders.” He said:
“The Warner Bros. Discovery Board reinforced that Netflix’s merger agreement is superior and that our acquisition is in the best interest of stockholders. This was a competitive process that delivered the best outcome for consumers, creators, stockholders and the broader entertainment industry. Netflix and Warner Bros. complement each other, and we’re excited to combine our strengths with their theatrical film division, world-class television studio, and the iconic HBO brand, which will continue to focus on prestige television. We’re also fully committed to releasing Warner Bros. films in theaters, with a traditional window, so audiences everywhere can enjoy them on the big screen.”
Netflix’s co-CEO Greg Peters added: “By acquiring Warner Bros., we’ll be able to offer audiences and creators around the world even more choice, value and opportunity. This transaction is fundamentally pro-consumer, pro-innovation, pro-creator and pro-growth. Together we will deliver an even broader selection of great series and films that audiences can watch at home and in theaters, while driving long-term value for our stockholders. We’re excited to begin this new chapter and continue to entertain and delight fans around the world.”
Paramount’s Bid Has Too Many Risks
In another report shared by The Hollywood Reporter, Warner Bros. Discovery’s chair of the board of directors, Samuel A Di Piazza Jr. explained why the deal with Paramount was a no-go.
“Following a careful evaluation of Paramount’s recently launched tender offer, the Board concluded that the offer’s value is inadequate, with significant risks and costs imposed on our shareholders. This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals. We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination.”
While this should be the end of the matter, Ellison does not seem to be backing down and claimed that he has “received feedback” from WBD shareholders who “clearly understand the benefits” of the offer. The offer, which was reportedly the one that Paramount brought to the table during the bidding rounds, is expected to be completely rejected by shareholders, but many believe this will just lead Ellison to increase his offer. One day, someone could make a drama out of this…and it will probably be Netflix.
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