Paramount Skydance’s (l) move attempts to derail Netflix’s (r) $72 billion deal with Warner Bros. Discovery|Ghaith baazaoui|Public domain; CC BY-SA 3.0
Entertainment giant Paramount Skydance, fresh off its merger this year, has launched a hostile all-cash bid for Warner Bros. Discovery (WBD), valuing the company at $108.4 billion.
The move attempts to derail Netflix’s existing $72 billion deal with WBD to acquire its streaming and studio business.
Paramount’s offer for all of WBD would give $30 per share. CEO David Ellison, son of Oracle founder Larry Ellison, told CNBC, “We’re really here to finish what we started.” The company had submitted three bids for WBD in September, even before it put up a formal sale process.
Who is backing it?
The bid is majorly backed by the Ellison family, private equity firm RedBird Capital, and $54 billion in debt from Bank of America, Citi, and Apollo Global Management.
Apart from these, other financiers include Jared Kushner’s Affinity Partners and several Middle Eastern sovereign wealth funds. Jared is the son-in-law of President Donald Trump.
The bidding drama has drawn antitrust scrutiny from politicians and analysts. Democratic senators have warned that a Paramount-WBD combination would consolidate too much television content. The political connections of Paramount’s financiers also raise questions about influence.
Netflix co-CEO Ted Sarandos defended their deal by claiming that, unlike Paramount’s proposal, Netflix’s acquisition would avoid job cuts.
Both deals carry substantial breakup fees and regulatory uncertainty.