"While Netflix Inc. and Paramount Skydance Corp. vie for President Donald Trump's blessings in their competing bids for Warner Bros. Discovery Inc., investors have an irony to consider. The valuation of faltering cable TV networks like CNN, TNT and Discovery - among the TV industry's least-coveted properties today - is much of what separates Paramount's hostile takeover bid from Netflix's friendly offer."
"Paramount kicked the bidding war into high gear Monday, going directly to stockholders with a $30-a-share all-cash bid that values all of Warner Bros. at $108.4 billion, including debt. It's aiming to derail Netflix's agreement announced last week to buy Warner Bros.' studios, streaming and HBO businesses for $27.75 a share in cash and stock. The $2.25-a-share difference between the offers lies in those struggling cable channels, which Warner Bros. announced in June that it would spin off."
"The lower you value the cable assets, the greater advantage Paramount's bid has. If shareholders believe the cable operations are more highly valued, then Netflix's bid, which assumes they will be spun off, means investors get an overall bigger sum of money. Paramount Chief Executive Officer David Ellison and his team met Tuesday with investors at the UBS media conference in New York, trying to convince them their offer is better than Netflix's, according to people familiar with their efforts."
Netflix Inc. and Paramount Skydance Corp. are competing to acquire Warner Bros. Discovery, with Paramount's $30-a-share all-cash bid valuing the company at $108.4 billion including debt. Netflix previously agreed to buy Warner Bros.' studios, streaming and HBO businesses for $27.75 a share in cash and stock, an offer that excludes the cable networks Warner announced it would spin off. The $2.25-a-share gap between the bids reflects differing valuations for faltering cable channels such as CNN, TNT and Discovery. Paramount values those assets at $1 a share, while some analysts estimate closer to $4. Paramount is courting investors and assembling financing from the Ellison family, Middle East sovereign wealth funds, RedBird Capital and Affinity Partners.
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