Paramount Skydance has escalated its bid for Warner Bros. Discovery in a move that could disrupt the streaming market dominance struggle. A source familiar with the matter disclosed to Reuters on Monday, suggesting Paramount is intensifying efforts to prevent Warner Bros. from sealing a deal with Netflix.
The bidding war between Warner Bros., Netflix, and now Paramount pits the “Harry Potter” and “Game of Thrones” franchises against each other. Paramount’s latest offer values Warner Bros. Discovery at $108.4 billion in cash or 30 shares per share—a significantly higher valuation compared to Netflix’s initial $27.75 per share in cash for a total price tag of $82.7 billion.
This war is about more than just the assets: it’s about securing Hollywood’s most prized properties and establishing dominance in the streaming industry. Netflix, with its ample resources, could now match or even exceed Paramount’s latest offer. Meanwhile, Oracle billionaire Larry Ellison backs this rival bid from Paramount, adding significant leverage to the deal.
Warner Bros., which initially offered $27.75 per share in cash for Warner Bros. Discovery and $82.7 billion total, has authorized Netflix to match any new bids. The bidding war is about more than just numbers; it’s also a strategic game of who can better protect shareholder interests and ensure the smooth execution of deals.
Warner Bros., led by David Zaslav, recently rejected an enhanced proposal from Paramount that included $2.8 billion in termination fees for Netflix and a 25-cent per share quarterly “ticking fee” to compensate shareholders. Warner Bros. offered a revised deadline of seven days for Paramount to submit its best and final offer or face rejection.
Analysts at Moffett Nathanson previously suggested an offer around $34 per share would settle the bidding war, valuing Discovery Global assets at between $1.33 to $6.86 per share according to Warner Bros.’ estimates. Netflix contends that its deal includes greater strategic flexibility and potential financial benefits from the spinoff of Discovery Global into a separate company.
Paramount has raised questions about this cable spinoff’s value, emphasizing it as essential to their own offer but not considered by Warner Bros., who believes it offers significant strategic benefits for the new entity. This tension could lead to further debates over Discovery Global’s valuation and impact on market dynamics post-deal.
Furthermore, Ancora Capital, an activist investor with a $200 million stake in Warner Bros., has increased pressure on David Zaslav. The firm threatened to vote against the Netflix deal if Warner Bros. continues to avoid discussions with Paramount. This could intensify tensions between the parties involved and potentially influence shareholder votes during annual meetings.
The outcome of this bidding war will be pivotal in determining who holds the reigns over these iconic franchises and shapes the future of streaming industry leadership.