The Sting: Paramount launches $108 billion hostile takeover bid for Warner

Just days after the deal with Netflix, the battle for control of the Hollywood giant continues on “Trumpian” grounds.

The entertainment world is in shock: just days after the agreement in which Warner Bros. Discovery Inc. agreed to be acquired by Netflix Inc., Paramount Skydance Corp. has thrown down the gauntlet with a hostile bid of $108 billion, aimed directly at the iconic studio’s shareholders. A move that reshuffles the deck and puts Warner in the difficult position of explaining why it didn’t take the Ellison-backed rival more seriously.

However, the offers are not comparable. Netflix is offering $27.75 per share in cash, plus $4.50 in Netflix stock, leaving shareholders with a “piecemeal” stake in the cable channels that will soon be spun off. Analysts estimate the total offer is worth around $32 per share. Paramount, on the other hand, is offering $30 per share in cash for all of Warner, valuing the cable business at only $1 per share. The deal also promises a faster and more certain path to completion, avoiding the antitrust risks Netflix will face with the HBO merger.

Paramount’s move comes “packaged” in Trump style: part of the financing comes from Affinity Partners, the boutique of former President Trump’s son-in-law Jared Kushner, and from Middle Eastern sovereign wealth funds. The strategy echoes the success of the Electronic Arts acquisition and puts Netflix under pressure. Investors are reacting nervously, as the bidding war looks set to intensify.

Paramount does not hide its intention to close the deal and aims for annual savings of $6 billion compared to the $2.5 billion projected by Netflix. Bloomberg Intelligence still sees room for the offer to rise to $35 per share. Now the ball is in David Zaslav’s court: accept Paramount’s challenge or defend the Netflix deal. Hollywood has never witnessed such a spectacular battle.

Andrea Pelucchi