by Thinus Ferreira
Paramount isn't going gently into the good night and on Monday launched a hostile takeover bid of Warner Bros. Discovery, after Netflix and WBD on Friday announced that Netflix is buying WBD.
Paramount Skydance is offering an all-cash buy to WBD's shareholders, backed by the Ellison family and RedBird Capital.
Whereas Netflix is buying Warner Bros.'s TV and film studios as well as its streamer HBO Max, Paramount wants all of WBD, including its Discovery Global set of linear TV channels.
Paramount on Monday said that its deal to snap up WBD is of superior value to shareholders and won't face the uncertain regulatory process that a Netflix buyout of WBD will confront.
Since Netflix is the world's and the United States' largest video streaming service, it will raise anti-trust issues when it wants to acquire HBO Max as a big video streaming service as well that specialises in premium content.
On Monday, Paramount said that it is taking its all-cash offer directly to WBD shareholders since Paramount believes that they were not presented with "the most compelling and superior transaction".
According to Paramount, a Netflix transaction of WBD represents "inferior and uncertain value, a protracted and uncertain multi-jurisdictional regulatory clearance process, a complex and volatile mix of equity and cash, and ownership of Global Networks as a standalone over-leveraged company whose future trading value is uncertain".
Paramount says it is offering $18 billion more than Netflix to buy the entirety of WBD.
David Ellison, chairman and CEO of Paramount, in a statement, says, "WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company".
"Our public offer, which is on the same terms we provided to the Warner Bros Discovery board of directors in private, provides superior value and a more certain and quicker path to completion."
"We believe the WBD board of directors is pursuing an inferior proposal which exposes shareholders to a mix of cash and stock, an uncertain future trading value of the Global Networks linear cable business and a challenging regulatory approval process."
"We are taking our offer directly to shareholders to give them the opportunity to act in their own best interests and maximise the value of their shares."
"We believe our offer will create a stronger Hollywood. It is in the best interests of the creative community, consumers and the movie theatre industry."
"We believe they will benefit from the enhanced competition, higher content spend and theatrical release output, and a greater number of movies in theatres as a result of our proposed transaction. We look forward to working to expeditiously deliver this opportunity so that all stakeholders can begin to capitalise on the benefits of the combined company."
Neither Netflix nor Warner Bros. Discovery had immediate comment.
Emarketer senior analyst Ross Benes told Reuters "The Warner Bros Discovery acquisition is far from over. Netflix is in the driver's seat but there will be twists and turns before the finish line. Paramount will appeal to shareholders, regulators and politicians to try to stymie Netflix. The battle could become prolonged."
Canal+'s MultiChoice is currently in contentious channel carriage negotiations with Warner Bros. Discovery for a carriage extension of 12 TV channels on the DStv pay-TV service in South Africa and the Rest of Africa (RoA) region.
With no new deal, MultiChoice will lose the 12 TV channels by the end of December 2025, as well as studio output like the TV content from Warner Bros. Television and films from Warner Bros. Pictures, as well as everything from HBO, all bought for M-Net (DStv 101), the M-Net Movies channels, as well as MultiChoice's streamer Showmax it runs with Comcast's NBCUniversal.
On Monday afternoon, MultiChoice Group said that it "is aware of the announcement made regarding Warner Bros. Discovery and Netflix".
"Our own commercial discussions with WBD remain ongoing, and we are not in a position to comment on the negotiations of other industry players. There is no final decision regarding any WBD channels or content on our platforms."
"As always, any updates that may affect our customers will be communicated directly and transparently. Our focus remains on providing the best possible content offering."
