David Ellison’s first eight offers to buy all of Warner Bros. Discovery were rejected. Now, the Paramount Skydance CEO is betting that the ninth try’s the charm.
Paramount just adjusted its all-cash offer for all of WBD, though it didn’t raise its topline bid from $30 per share. WBD turned down Paramount’s previous offers and is selling its streaming and studio assets, including HBO, to Netflix for $27.75 per share in cash. (Unlike Paramount’s bid, the Netflix deal doesn’t include WBD’s cable channels, like HGTV and TNT.)
Ellison’s company told WBD’s board of directors on Tuesday morning that it had made the following changes to its offer:
- Adding a so-called “ticking fee” that will pay WBD shareholders $0.25 per share, or about $650 million, every quarter that its bid hasn’t closed, starting in January 2027
- Paying other costs involved with taking its offer, like a $2.8 billion breakup to Netflix and a possible $1.5 billion debt refinancing cost
Paramount also reiterated that the $43.6 billion in equity it’s pledging in its $108 billion offer is fully backstopped by the Ellison family. Ellison’s father, Larry, is one of the richest people in the world after cofounding tech giant Oracle in the late 1970s, and has also been a major supporter of President Donald Trump.
Ellison’s revamped offer, which would give WBD shareholders more money every quarter if the transaction doesn’t close by January 2027, helps “underscore confidence in the speed and certainty of its regulatory pathway,” Paramount said.
While the Ellisons have rapport with Trump, Netflix co-CEO Ted Sarandos has built a relationship with the president as well.
Trump said last week he’d decided he “shouldn’t be involved” in the regulatory process and will leave the decision to the Department of Justice, after saying in December that he’d “be involved” in the Netflix-Warner Bros. regulatory decision.
Netflix has pitched itself as a better option for shareholders and the entertainment industry, and has said that a Netflix-Warner Bros. tie-up would “create and protect jobs.” Sarandos was grilled on Capitol Hill last week in a politically charged Senate subcommittee meeting about the Netflix-Warner Bros. deal.
WBD shareholders now have until February 20 to tender their shares to Paramount, which would pressure the board to choose the Ellison offer over Netflix’s.
Although Ellison covets WBD’s assets, he hasn’t raised his overall purchase price since the Netflix deal was announced. Ellison has said Paramount’s bid is “superior to Netflix’s,” and his company has repeatedly made that case to WBD shareholders, arguing that WBD’s TV networks aren’t worth much, if anything, after factoring in debt and the trading price of Versant, a similar company.
The Paramount head honcho had foreshadowed a potential sweetening of the bid when he texted WBD CEO David Zaslav on December 4, saying: “Please note importantly we did not include ‘best and final’ in our bid.”
Ellison was also overheard saying in mid-December that WBD’s board couldn’t accept his $30-per-share bid without “admitting breach of fiduciary duty,” Business Insider reported. That’s because it was the same offer the WBD board — which has a duty to act in the best interest of shareholders — had previously rejected.
All this suggested that an upgraded bid could be in the works.
Some in Hollywood expected to see a bidding war that would benefit WBD shareholders, regardless of whether Netflix or Paramount won. Kevin Mayer, Disney’s former top dealmaker, predicted that the battle between Netflix and Paramount could raise the cost to buy WBD by $5 billion to $10 billion.
So far, that bidding war hasn’t materialized as Ellison holds firm, betting that his bid is already enough to win over WBD shareholders.
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