Warner Bros. Discovery Shareholder Calls on Netflix to Revise Offer After Paramount Clarifies All-Cash Bid

One Warner Bros. Discovery shareholder is calling for Netflix to revise its bid to acquire WBD after Paramount Skydance clarified its all-cash offer. Mario Gabelli, the CEO of GAMCO Investors as well as a WBD shareholder, called on Netflix Monday morning to “simplify [the] structure” of its bid.

“Netflix needs to simplify structure … and increase cash portion … tax issues such as basis allocation for taxable holders needs focus,” Gabelli wrote on X.

Representatives for Netflix did not immediately respond to TheWrap’s request for comment.

Following the Warner Bros. Discovery board’s decision to accept Netflix’s offer to acquire the streaming and studio portion of the company, Paramount countered with a hostile $30 per share all-cash bid. Whereas Netflix’s offer would come in at $82.7 billion, Paramount’s would come in at $108.4 billion. It’s also important to note that while Netflix is only interested in acquiring Warner Bros., Paramount is interested in acquiring all of WBD, including the cable assets that are of no interest to Netflix.

Despite Paramount’s offer being higher, it has been in contention. After thoroughly reviewing the offer, the WBD board told its shareholders last week that it did not recommend they take Paramount’s offer. Two of the major reasons behind that recommendation were the fact that Paramount had not addressed many of the board’s concerns that were previously mentioned numerous times and that Paramount “consistently misled” WBD shareholders into thinking $40.7 billion of equity financing proposed in the all-cash transaction was fully backstopped by the Ellison family.

On Monday, Larry Ellison — Oracle co-founder and father of Paramount Skydance CEO David Ellison — addressed that latter point. Ellison agreed to provide an “irrevocable personal guarantee” of $40.4 billion of the equity financing for Paramount’s WBD bid as well as any damages claims against Paramount. Though that’s a massive number, it’s less than the $40.7 billion mentioned in Paramount’s initial hostile takeover bid.

He also agreed not to revoke the family trust or “adversely transfer” its assets while a transaction is pending. Because so much of Paramount’s offer is tied up in the personal assets of the Ellison family, possibly transferring that wealth has been a major concern.

Paramount also agreed to publish records that will confirm the Ellison family trust owns approximately 1.16 billion shares of Oracle common stock and raised its proposed breakup fee from $5 billion to $5.8 billion. That means if WBD did take Paramount’s offer and the deal does not pass regulatory approval, WBD would get $5.8 billion. Additionally, the clarified offer provides for flexibility when to comes to “debt refinancing transactions, representations and interim operating covenants” for WBD.

The amended offer is conditional on WBD continuing to own 100% of its global networks business. As for the other terms and conditions on the deal, those remain unchanged.

The post Warner Bros. Discovery Shareholder Calls on Netflix to Revise Offer After Paramount Clarifies All-Cash Bid appeared first on TheWrap.