Paramount Looking to Make 'Hostile' Move Amid Netflix Merger
The Netflix merger with Warner Bros. is ruffling a lot of feathers. Some fans are concerned about the quality of Netflix's programming, especially since HBO is being acquiring by the streamer.
However, another major company's executives are reportedly also unhappy with the merger. In fact, Paramount is so unhappy that it's reportedly planning to make a "hostile" move to stop it. Paramount wanted to purchase Warner Bros. Discovery but lost out to Netflix. Now, a new report says that Paramount may "appeal directly" to Warner Bros. shareholders through a "hostile takeover offer."
Why Would Paramount Potentially Make a Hostile Move Against Netflix?
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What would Paramount's position be? According to Axios, Paramount "could argue that its all-cash bid of $30 a share is better in terms of both price and the likelihood of regulatory approvals."
However, to make that case, the company "also would need to disclose more information about its debt financing," Axios reported. However, according to Axios, Netflix is moving full-steam ahead.
"We've signed our deal and we are running full speed towards regulatory approval," Netflix co-CEO Ted Sarandos told investors, according to Axios. Paramount has "raised concerns" about the acquisition, causing the deal to potentially get "messy," The Wall Street Journal reported.
According to The New York Post, Paramount Skydance chief David Ellison was in Washington D.C. to "press his case" against the merger with top political figures. Netflix's offer was higher, The Post learned.
The key argument by Paramount Sundance is that the Netflix offer, although higher, must be considered through the lens of greater uncertainty about whether it can actually get done, The Post noted.
Paramount Skydance "signaled in multiple letters this week" that it might go hostile, The Post noted, as it believes that Warner Bros. shareholders will face "unacceptable risks" by banding with Netflix. The hurdles are regulatory in nature, The Post added.
Paramount Skydance's Owners Are Reportedly Unhappy With the Deal
David and Larry Ellison, who own Paramount Skydance, are very unhappy with the Netflix merger, The Post reported, quoting a source as saying, “They are really p*ssed over at Paramount Skydance. They think this was a rigged deal process because of the friendship between the CEOs and they’re betting the shareholders will be pissed when they find out what went down.”
Netflix touted the deal in a press release. "Today, Netflix, Inc. (the Company) and Warner Bros. Discovery, Inc. (WBD) announced they have entered into a definitive agreement under which Netflix will acquire Warner Bros., including its film and television studios, HBO Max and HBO," Netflix wrote on December 5.
"The cash and stock transaction is valued at $27.75 per WBD share (subject to a collar as detailed below), with a total enterprise value of approximately $82.7 billion (equity value of $72.0 billion). The transaction is expected to close after the previously announced separation of WBD’s Global Networks division, Discovery Global, into a new publicly-traded company, which is now expected to be completed in Q3 2026," the release adds. "This acquisition brings together two pioneering entertainment businesses, combining Netflix’s innovation, global reach and best-in-class streaming service with Warner Bros.’ century-long legacy of world-class storytelling."