Paramount Skydance is launching a hostile bid to buy Warner Bros. Discovery after it lost out to Netflix in a monthslong bidding war for the legacy assets, the company said Monday.
Paramount will go straight to WBD shareholders with an all-cash, $30 per share offer. That’s the same bid WBD rejected last week and equates to an enterprise value of $108.4 billion.
The offer is backstopped with equity financing from the Ellison family and the private equity firm RedBird Capital as well as $54 billion in debt commitments from Bank of America, Citi and Apollo Global Management, Paramount said in a news release.
A portion of the equity financing comes from outside Middle Eastern financing partners including Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’imad Holding Company PJSC, and the Qatar Investment Authority. Another portion derives from Jared Kushner’s Affinity Partners. Kushner is U.S. President Donald Trump’s son-in-law.
Those partners have agreed to “forgo any governance rights,” including board seats, as part of their non-voting equity investment, according to a Paramount filing. The modifications allow the deal to be outside of the jurisdiction of the Committee on Foreign Investment in the U.S., or CFIUS.
Shares of Paramount gained 9% Monday. Warner Bros. Discovery’s shares rose about 4% while Netflix was down 3%.
“We’re really here to finish what we started,” Paramount Skydance CEO David Ellison told CNBC’s “Squawk on the Street” on Monday. “We put the company in play.”
Paramount Skydance began its hunt for Warner Bros. Discovery in September, submitting three bids before WBD launched a formal sale process that ultimately brought in other suitors.
On Friday, Netflix announced a deal to acquire WBD’s studio and streaming assets for a combination of cash and stock, valued at $27.75 per WBD share, or $72 billion. Paramount had been bidding for the entirety of Warner Bros. Discovery, including those assets and the company’s TV networks like CNN and TNT Sports.
“We’re sitting on Wall Street, where cash is still king. We are offering shareholders $17.6 billion more cash than the deal they currently have signed up with Netflix, and we believe when they see what it is currently in our offer that that’s what they’ll vote for,” Ellison said.
Ellison said Monday he places a value of $1 per share on the linear cable assets, which are set to trade as a separate public entity called Discovery Global in mid-2026. WBD executives have privately valued the assets closer to $3 per share.
Paramount has repeatedly argued to the WBD board of directors that keeping Warner Bros. Discovery whole is in the best interest of its shareholders.
Paramount made a bid on Dec. 1 and heard back from WBD that it needed to make certain alterations to the offer, Ellison said Monday. When Paramount made the changes and upped its bid to $30 per share, Ellison never heard back from WBD CEO David Zaslav, he said.
Ellison said he told Zaslav via text message that $30 per share wasn’t the company’s best and final offer, suggesting the company is willing to bid higher still.
Ellison argued Paramount’s deal will have a shorter regulatory approval process given the company’s smaller size and friendly relationship with the Trump administration. He called Trump a believer “in competition” and said Paramount’s combination with WBD will be “a real competitor to Netflix, a real competitor to Amazon.”
Ellison also threw cold water on Netflix’s chances of regulatory approval.
“Allowing the No. 1 streaming service to combine with the No. 3 streaming service is anticompetitive,” Ellison said.
CNBC reported Friday that the Trump administration was viewing the deal with “heavy skepticism,” and Trump said Sunday that the market share considerations could pose a “problem.”
Netflix agreed to pay Warner Bros. Discovery $5.8 billion if the deal is not approved, according to a Securities and Exchange Commission filing Friday. Warner Bros. Discovery said it would pay a $2.8 billion breakup fee if it decides to call off the deal to pursue a different merger.
Netflix, for its part, once again championed the deal as positive for shareholders, consumers and the media industry as a whole when its top leadership spoke at the UBS Global Media and Communications Conference on Monday.
Co-CEO Greg Peters said they recognize the Netflix deal came as a shock but called the Warner Bros. studio and HBO Max content complementary to Netflix’s business.
Co-CEO Ted Sarandos said the acquisition would protect jobs at a time when layoffs have been rampant across media: “In the offer that Paramount was talking about today, they also were talking about $6 billion of synergies. Where do you think synergies come from? Cutting jobs. So we’re not cutting jobs, we’re making jobs.”
— CNBC’s Lillian Rizzo contributed to this report.
