Paramount has launched a strong all-cash offer to buy Warner Bros. Discovery (WBD). The move was announced on Monday and came right after Netflix won the previous bidding round with a $27.75 per share cash-and-stock deal. Paramount’s bid offers WBD shareholders $30 per share, which is significantly higher than Netflix’s, but how was that possible?
Kushner and gulf investors step in for Paramaount’s WBD deal
Paramount revealed in a regulatory filing that Affinity Partners, the private equity firm led by Donald Trump’s son-in-law Jared Kushner, is backing the bid, according to the Washington Post. The same report suggests, three Middle Eastern sovereign wealth funds, from Saudi Arabia, Abu Dhabi, and Qatar, are also financing the deal. Paramount said all outside investors, including Kushner’s firm, will forgo governance rights to avoid regulatory barriers, meaning the US Committee on Foreign Investment will not oversee the deal. Chinese tech giant Tencent, which was initially considered a partner, is no longer part of the transaction.
David Ellison, Paramount Skydance CEO and son of Oracle co-founder Larry Ellison, emphasised that the all-cash offer provides a “more certain and quicker path to completion” for WBD shareholders.
Kushner being on board with the Paramount deal might come as a shock to Netflix co-CEO Ted Sarandos, who, back in November, held a private meeting with Donald Trump at the White House and left feeling that Netflix’s future deal with WBD wouldn’t face any resistance from the Trump administration. But on Sunday, Trump said the deal ‘could be a problem,’ adding that he is taking a close look.
President Trump commented on both deals. While praising Netflix co-CEO Ted Sarandos, whom he met last week, Trump said he hadn’t discussed Paramount’s bid with Kushner and was not ready to take sides. “None of them are particularly great friends of mine,” Trump told reporters on Monday. “I want to do what’s right.”
Speaking at an event on Monday, Ted Sarandos labelled Paramount’s bid “entirely expected” and said he is “super confident” the Netflix deal will succeed.
Responding to Paramount’s offer, WBD said it will “carefully review and consider Paramount Skydance’s offer” but “The Board is not modifying its recommendation with respect to the agreement with Netflix. Warner Bros. Discovery intends to advise its stockholders of the Board’s recommendation regarding Paramount Skydance’s tender offer within 10 business days,” according to Deadline.
Paramount claims its offer is better
According to the Washington Post, Paramount argued that its offer is better than Netflix’s, which only targets the studio and HBO Max while leaving Global Networks out. Ellison said the Netflix deal exposes shareholders to uncertainty over cash and stock value, potential regulatory delays, and risks related to the Global Networks segment. “We are taking our offer directly to shareholders to give them the opportunity to act in their own best interests and maximise the value of their shares,” Ellison said in a press release on Monday.
Paramount recently acquired conservative news website the Free Press for $150 million and appointed Bari Weiss, its founder, as CBS News editor-in-chief. The company also paid $16 million to settle a lawsuit filed by Trump over a CBS “60 Minutes” interview.
Both deals raise antitrust concerns. Netflix, combined with WBD, would control a major Hollywood studio and streaming service. Paramount’s bid would merge two large studios along with CBS and CNN.