Warner rejects hostile takeover bid from Paramount
An ownership change at Warner Bros. would drastically transform the entertainment and media industry, impacting film production, consumer streaming platforms and the news landscape.
The Warner Bros. Discovery logo at one of its offices.
Warner Bros. Discovery rejected this Wednesday a hostile takeover bid for Paramount launched last week, attempting to halt streaming giant Netflix’s plans to acquire the Hollywood giant.
In a statement cited by AFP, Warner Bros. said its board unanimously determined that Paramount's offer "is not in the best interests of WBD and its shareholders and does not meet the criteria of a ‘Superior Proposal’ under the terms of WBD's merger agreement with Netflix," officially announced on Dec. 5.
"We firmly believe that the union of Netflix and Warner Bros. will offer consumers more choice and value, enable the creative community to reach an even larger audience with our combined distribution, and drive our long-term growth," the conglomerate added.
Paramount's hostile bid
Paramount submitted a counteroffer days ago, asking shareholders to reject the deal with Netflix, which was also favored by the Warner Bros. board.
Paramount is offering $30 per Warner share versus the $27.75 that Netflix had put on the table in negotiations.
While Paramount's offer—which valued Warner Bros. at $108 billion—is not entirely out of the question, the film distribution and production company did make it clear that the board is not in favor of the proposal.
Likewise, shareholders could still sell their shares to the streaming platform, leaving the entire company in their hands, including cable giants CNN and Discovery.
Paramount reportedly submitted six different bids: All rejected!
The Paramount conglomerate said it presented six different offers that Warner's management group rejected before announcing its deal with Netflix. It was only after the announcement that it presented its offer directly to the conglomerate's shareholders.
An ownership change at Warner would drastically transform the entertainment and media industry, impacting film production, consumer streaming platforms and, in Paramount's case, the news landscape.
What would happen to theatrical releases and the news world?
While Netflix has promised to continue distributing Warner Bros. films in theaters if its bid to acquire the storied studio is successful, critics have pointed to its past business model and its reliance on online releases.
Paramount and Warner Bros. are two of the five major historic studios left in Hollywood today.
On the other hand, Paramount's attempt to acquire Warner's cable networks and news business would also bring together CBS and CNN. In addition to further accelerating media consolidation, this could raise questions about changes in editorial control.
A precedent not lost on analysts in this area was the before and after at CBS News, after Skydance's purchase of Paramount for $8 billion, which was completed in August.
Trump’s doubts about the Warner sale
President Donald Trump also expressed doubts about Netflix's purchase of the historic Hollywood studio, saying the streaming giant already has "a big chunk of the market" and "could be a problem."
The proposal raised antitrust concerns and outrage among the Hollywood elite.
If the deal were to go through, Netflix would take over a huge movie catalog and the prestigious HBO Max streaming service. However, it would not inherit cable channels such as CNN and Discovery, which Warner Bros. Discovery will spin off before the deal closes.
Still, the platform would find itself at the forefront of a mammoth catalog, including “Harry Potter” and “The Lord of the Rings,” DC Studios superheroes (“Batman” and “Superman,” among others) and “Game of Thrones.”
It is the biggest deal in the sector since Disney bought Fox for $71 billion in 2019.
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