Warner Bros. Discovery to reject Paramount's $108.4B bid?
What's the story
Warner Bros. Discovery's board is expected to urge shareholders to turn down Paramount-Skydance's $108.4 billion takeover offer, as reported by Reuters. The decision could be announced as early as Wednesday, marking a significant development in the battle for the media giant's valuable assets. These assets include WBD's iconic film and television studio with a vast content library of classics like Casablanca and Citizen Kane, modern hits like Harry Potter and F.R.I.E.N.D.S, and the HBO Max streaming service.
Bid details
Netflix emerged as the preferred suitor earlier this month
Earlier this month, Netflix emerged as the preferred suitor with a $27 billion cash-and-stock bid for WBD's non-cable assets. Paramount CEO David Ellison responded by taking his $30-a-share, all-cash offer for the entire company directly to WBD's shareholders. Paramount said in regulatory filings that its offer is superior to Netflix's and would face a clearer path to regulatory approval.
Financing details
Paramount's bid supported by $41 billion in new equity
Paramount's bid is supported by $41 billion in new equity from the Ellison family and RedBird Capital, along with $54 billion in debt financing from Bank of America, Citi, and Apollo. Meanwhile, Jared Kushner's Affinity Partners, which was a small investor in Paramount's offer, has reportedly exited the bidding process.
Bidding history
Paramount's initial offer and subsequent bids
Paramount first offered to acquire Warner Bros. Discovery in September. After making multiple bids, WBD announced it was exploring a sale due to interest from multiple buyers. Paramount kept submitting bids, but earlier this month, the company decided to sell a large portion of its business to Netflix.