Warner Bros. is advising shareholders to decline a buyout offer from Paramount Skydance, asserting that a competing bid from Netflix would deliver superior benefits for consumers. In a statement on Wednesday, Warner Bros. emphasized the potential for enhanced consumer choice and value through a collaboration with Netflix, highlighting the opportunity to expand audience reach and foster long-term growth. The company expressed confidence in the complementary nature of Netflix’s extensive franchise portfolio, vast content library, and robust studio capabilities with its existing operations.
Paramount escalated its bid last week, urging shareholders to oppose the proposed deal with Netflix that Warner Bros. had endorsed. Paramount proposed $30 US per Warner share, exceeding Netflix’s offer of $27.75 US. While Warner Bros. has signaled its preference for the Netflix deal in the shareholder letter, Paramount’s bid remains an option for shareholders to consider. Paramount’s bid includes the acquisition of the entire company, encompassing prominent assets like CNN and Discovery, unlike Netflix’s offer, which excludes the purchase of Warner Bros.’ cable operations. The completion of Netflix’s acquisition would be contingent on regulatory and shareholder approvals, subject to Warner Bros.’ planned separation of its cable business.
Paramount reiterated its bid and encouraged Warner Bros. Discovery shareholders to express support for its “superior offer.” Paramount’s CEO, David Ellison, emphasized the positive reception from Warner Bros. Discovery shareholders regarding the merits of their proposal, asserting that the transaction aligns with the interests of shareholders, consumers, and the creative industries.
The takeover bids from both Paramount and Netflix have attracted regulatory scrutiny due to their potential industry impact. Warner Bros. emphasized its diligent evaluation process and adherence to fiduciary responsibilities in reviewing Paramount Skydance’s offers. Concerns have been raised about the implications of merging Netflix’s vast streaming platform with Warner’s HBO Max, potentially creating market dominance. Critics suggest that such consolidation could reshape film and TV production dynamics. The potential acquisition of Warner’s cable networks and news entities by Paramount has also raised concerns about media consolidation and editorial control implications.
U.S. President Donald Trump’s involvement in the deal has added a political dimension, with Trump expressing reservations about the market control implications of Netflix’s bid. Trump’s ties to Paramount’s CEO and the backing of Paramount’s bid by entities associated with him have fueled speculation about political influence on the regulatory process. While Trump has distanced himself from certain investment associations related to the deal, he continues to engage publicly on editorial decisions impacting media entities involved in the transaction.