Paramount Launches Hostile $108.4 Billion Bid to Acquire Warner Bros Discovery, Challenging Netflix

Paramount Skydance has escalated the battle for Warner Bros Discovery (WBD) with a $108.4 billion hostile takeover bid, significantly outbidding Netflix's earlier $83 billion offer. Unlike Netflix's partial acquisition focusing on Warner Bros studio and HBO Max, Paramount aims to acquire the entire company, including its television channels, such as CNN and Discovery. Paramount's CEO, David Ellison, emphasized their offer as the highest on the table and highlighted their readiness to finance the deal entirely in cash, contrasting Netflix's stock-based proposal.

This move comes shortly after WBD agreed to a partial sale to Netflix, where the latter secured a $72 billion stake following a competitive bidding war. Analysts have expressed mixed views about the implications; concerns over media consolidation and potential regulatory challenges have been raised. Chris Beauchamp from IG Group noted Paramount's confidence may be bolstered by close ties to political power, given Ellison's familial connections to influential figures. Meanwhile, MKI Global Partners warned about the dangers of concentrated media control, likely to attract scrutiny from regulators.

Ben Barringer of Quilter Cheviot believes Paramount's strategic necessity for this acquisition exceeds Netflix’s. Paolo Pescatore from PP Foresight described the scenario as chaotic, emphasizing Warner Bros’ need to carefully evaluate all avenues amid the intense bidding war. Ross Benes of eMarketer remarked that despite Netflix's current lead, the competition remains fierce. However, Craig Huber from Huber Research Partners cautioned Paramount about the risks of excessive debt amid pervasive revenue pressures on traditional media firms.

Donald Trump has voiced concern about Netflix's merger with Warner Bros potentially hurting market competition, an opinion that aligns with Paramount’s view of a better regulatory approval path. David Ellison claims that their all-cash bid improves the chances of regulatory acceptance compared to Netflix’s stock deal.

As the media landscape braces for the outcome, Paramount’s aggressive approach marks a significant escalation in the high-stakes contest for control of one of Hollywood's most valuable entertainment conglomerates.