Netflix Co-CEO Greg Peters Says Paramount’s WBD Bid ‘Doesn’t Pass the Sniff Test’
Netflix co-CEO Greg Peters has taken aim at Paramount’s hostile takeover bid for Warner Bros. Discovery, arguing that the $30 per share offer “doesn’t pass the sniff test.”
“That’s what the Warner Brothers board determined,” the executive told the Financial Times. “And I think that’s where the Warner shareholders are at too.”
The $108.4 billion bid is backed by Oracle co-founder Larry Ellison’s irrevocable personal guarantee towards $40.4 billion of the equity financing, and $55 billion in debt financing from Bank of America, Citigroup and Apollo Global Management. Its other equity partners include RedBird Capital Partners and three Middle Eastern sovereign wealth funds.
“Without Larry Ellison independently financing this thing, there’s no chance in hell Paramount would ever be able to pull this off,” Peters said.
He noted that Paramount is already “saddled with quite a lot of debt” and that the additional leverage needed to finance a deal is “pretty crazy.”
“If they were to move [higher], what kind of leverage would they have to have?” Peters added. “It’s hard to imagine how that works out well.”
RedBird Capital Partners founder and managing partner Gerry Cardinale pushed back, telling FT: ““Our leverage is nowhere near what they’re talking about. The Netflix deal is the Harry Houdini of deals.”
Paramount has extended the deadline on its tender offer to Feb. 20. Around 168.5 million shares have been tendered as of Wednesday, representing just 7% of WBD’s 2.48 billion outstanding shares.
Ellison has also launched a proxy fight seeking to block Netflix’s $83 billion deal and the spinoff of Warner’s cable networks into Discovery Global. Shareholders are expected to vote on the Netflix deal by April.
The Department of Justice’s Antitrust Division is currently reviewing the deal and has issued a request for more information. Netflix is also engaging with overseas regulators, including the European Commission.
Netflix has said the deal would close in the next 12 to 18 months and the Discovery Global spinoff is expected to be completed in the next six to nine months.
Peters’ comments come as the Netflix deal has faced concerns from consumers, Hollywood creatives and lawmakers on Capitol Hill alike for $83 billion deal’s potential impact on consumer prices, competition and the future of the theatrical business.
Paramount has also argued that such a deal would cement Netflix’s dominance in streaming, where it currently has 325 million paid subscribers and accounts for 9% of U.S. TV viewership as of December, per Nielsen. Warner Bros. Discovery reported a total of 128 million subscribers globally, though that figure includes both HBO Max and Discovery+.
President Donald Trump has warned that Netflix’s “very big market share” could pose a potential problem. The DOJ and Federal Trade Commission could determine that competition would be substantially diminished if Netflix exceeds a 30% market share through a combination with HBO Max, a threshold it is likely to pass.
Netflix co-CEO Ted Sarandos and Warner Bros. chief strategy officer Bruce Campbell will field questions from Senate lawmakers on the deal’s potential impact during an antitrust hearing in February.
More to come…
The post Netflix Co-CEO Greg Peters Says Paramount’s WBD Bid ‘Doesn’t Pass the Sniff Test’ appeared first on TheWrap.