Warner Bros Discovery is expected to recommend that shareholders vote against a hostile takeover bid from Paramount Global, according to reporting from several news outlets, dealing a blow to Paramount’s massive $108bn (€92.2bn) attempt to take over the rival studio. Euronews has reached out to Warner for further comment.
This comes after Paramount announced it was planning to go to Warner Bros’ shareholders directly in early December with an all-cash $30 per-share offer — bypassing the board after the studio rejected several of its acquisition proposals. Netflix, on the other hand, is proposing $27.75 per share in cash and stock.
Since the acquisition battle heated up, Warner Bros stock has been trading closer to $30 per share, shooting up from around $24 per share earlier this month.
Why is Warner Bros so hot right now?
The battle for Warner Bros has become a test of who will dominate the US media industry.
Whoever acquires the company would gain access to an extensive film and studio content library licensed under Warner Bros, as well as HBO content and the DC Comics franchise, which includes legacy characters such as Batman and Superman.
The company’s share price was widely considered to be undervalued as the company became bogged down by heavy debt and intense competition from Netflix, Amazon, and Apple.
On 5 December, Netflix made a formal offer for Warner Bros Discovery, which the company’s board agreed to support and which included HBO Max and HBO, after a high-stakes months-long bidding war.
In a statement, the streaming giant confirmed the mammoth $82.7bn (€71bn) deal, which is being framed as a bringing together of “two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most,” Warner Bros CEO and president David Zaslav said at the time.
If Warner Bros does break its current agreement with Netflix, it will owe the rejected streamer a $2.8bn (€2.4bn) fee.
Even so, Paramount still faces a number of hurdles before it can claim victory over Netflix, with critics notably questioning the financing of the offer.
Is Trump’s son-in-law involved?
President Donald Trump weighed in publicly on the Warner Bros sale a week ago, arguing that the news network CNN should be sold as part of any transaction involving its parent company. He criticised the network’s current leadership as “corrupt or incompetent”, insisting CNN be divested to secure broader political balance in their coverage.
Paramount’s acquisition proposal included acquiring cable and broadcast news assets currently owned by Warner Bros. This sparked worries among some lawmakers and observers that editorial coverage could shift, particularly with regard to reporting on the Trump administration.
Billionaire Oracle co-founder Larry Ellison is one of the principal financial backers of Paramount Skydance’s hostile bid, providing a large portion of the equity that underpins the offer and helping to secure other investors. His son, David Ellison, is chairman and CEO of Paramount Skydance.
That affiliation — coupled with the Ellisons’ friendship with Donald Trump and their role as major Republican donors — has led some analysts to believe that the Skydance bid is not merely a commercial offer but also a play for political influence.
Jared Kushner, Trump’s son-in-law, or more specifically his private equity firm Affinity Partners, was initially listed as a backer of Paramount’s hostile takeover bid. The firm has since pulled out of the financing consortium.
In a not-so-atypical turnaround, Trump criticised Paramount on Tuesday evening, claiming that he was not actually as cosy with Paramount as it may have seemed. Paramount owns CBS, a station that ended production of ‘The Late Show’ earlier this year. When the programme’s cancellation was announced, some suggested the decision linked to host Stephen Colbert’s criticism of the Trump administration. At the time, CBS said it was “purely a financial decision”.
The axing of the 33-year-old show came just days after Colbert publicly criticised Paramount for settling a $16mn (€13.7mn) lawsuit with Donald Trump at a time when the company was seeking regulatory approval for its Skydance merger.
“For those people that think I am close with the new owners of CBS, please understand that ’60 Minutes’ has treated me far worse since the so-called ‘takeover’, than they have ever treated me before,” Trump said in a social media post on Tuesday night. “If they are friends, I’d hate to see my enemies!”
’60 Minutes’ is a news show produced by CBS and was the subject of the $16mn defamation case settled earlier this year. Trump claimed that producers edited an interview with then-vice president Kamala Harris in a way that was deliberately deceptive.
