Paramount Skydance remains hopeful about WBD's potential Netflix exit
What's the story
Paramount Skydance is optimistic that Warner Bros. Discovery (WBD) will soon drop its deal with Netflix and restart the bidding war for the company, reported The New York Post. This confidence comes amid Paramount's recent agreement to cover a breakup fee if WBD chooses to walk away from the Netflix deal.
Deal dilemma
Investors question $72 billion WBD-Netflix deal
WBD, which owns the iconic Warner Bros. studio, HBO Max streaming service, and cable properties like Discovery and CNN, is reportedly under pressure to reconsider its deal with Netflix. Investors are questioning the valuation of this $72 billion offer and believe it may not pass regulatory scrutiny. A source involved in Paramount Skydance's bid said, "We're going to get this company sooner or later." "The numbers don't add up and there's no way this gets approved on antitrust grounds."
Legal battle
No communication from WBD to Paramount Skydance yet
Paramount Skydance, led by independent movie producer David Ellison and backed by his father Larry Ellison, has reportedly not received any communication from WBD about reopening the bidding process. Meanwhile, a WBD spokesperson declined to comment on the matter. Paramount has already sued WBD for allegedly ignoring its superior offer due to a friendship between WBD CEO David Zaslav and Netflix chief Ted Sarandos.
Deal details
Recap of the bidding war between Paramount and Netflix
In December, WBD revealed that it had agreed to sell its streaming and studio divisions to Netflix, turning down Paramount Skydance's proposal to acquire the entire company. Following this move, Paramount launched a hostile bid, calling on shareholders to back its offer instead. On paper, it appears that investors are in favor of Netflix and WBD. However, recent signs suggest a shift in shareholder sentiment toward reopening the bidding process.