Paramount makes a $108 billion hostile takeover bid for Warner Bros. Discovery

"Paramount has been none too pleased about Netflix striking an $82.7 billion deal to buy much of Warner Bros. Discovery (WBD). Now, Paramount is making a hostile takeover bid for WBD. It's making its pitch directly to WBD shareholders with an all-cash offer of $30 per share that expires on January 8. Late last week, the WBD board unanimously accepted Netflix's offer of $27.75 per share."

"That breaks down to $23.25 per share in cash and another $4.50 per share in Netflix stock. Netflix's overall bid is valued at $82.7 billion, while Paramount's totals $108.4 billion. There's a key difference when it comes to the Paramount offer, as it's for all of WBD. The latter is scheduled to split into two companies next year. Netflix only wants the Streaming and Studios side of WBD's business, which includes HBO Max and the Warner Bros. film, TV and game studios. Paramount is after the whole shebang, including WBD's cable channels (Global Networks). "WBD's Board of Directors recommendation of the Netflix transaction over Paramount's offer is based on an illusory prospective valuation of Global Networks that is unsupported by the business fundamentals and encumbered by high levels of financial leverage assigned to the entity," Paramount said in a press release on Monday. As of the end of September, WBD was carrying $34.5 billion of gross debt. It planned to saddle the Global Networks company (aka Discovery Global) with most of that. The Paramount offer includes financing from the Ellison family and RedBird Capital, but it would be taking on more debt to secure a deal for WBD. The bid includes "$54 billion of debt commitments from Bank of America, Citi and Apollo" (Engadget's parent company)."

Paramount launched a hostile all-cash bid to acquire Warner Bros. Discovery, offering $30 per share that expires on January 8. WBD's board unanimously accepted Netflix's $27.75-per-share offer composed of $23.25 cash and $4.50 in Netflix stock, valuing Netflix's bid at $82.7 billion. Paramount's competing proposal values WBD at $108.4 billion and would acquire the entire company, including Global Networks. Netflix seeks only WBD's Streaming and Studios assets. WBD plans to split into two companies, with most of $34.5 billion gross debt assigned to Global Networks. Paramount criticized the board's recommendation and secured financing and debt commitments to back its offer.

Read at Engadget