Activist WBD investor builds case to pivot from Netflix
Activist WBD investor builds case to pivot from Netflix
Ancora Holdings has built a roughly $200 million stake in Warner Bros. Discovery, and is pushing other investors to favor Paramount Skydance’s offer for the company.
Netflix is in a heavyweight fight to acquire Warner Bros. Discovery, and now it faces a new threat as it tries to close the deal. On Wednesday, an investment group named Ancora Holdings issued a press release indicating that it had purchased $200 million of Warner Bros. Discovery stock in an attempt to thwart Netflix’s $72 billion offer to purchase WBD’s TV and movie studios and the company’s streaming arm.
Key Details:
- Corporate activism: Ancora Holdings is opposing WBD’s deal to sell its assets to Netflix.
- Small stake, big stakes: Ancora owns less than 1% of WBD overall, but its announcement could cause a ripple effect.
- Advance on multiple fronts: Paramount recently added a new sweetener to its offer for WBD.
Ancora’s release makes it quite clear how the firm feels about Netflix’s bid to acquire WBD. Calling the agreement “flawed, inferior, and high risk,” Ancora urges fellow WBD investors to eschew Netflix’s offer in favor of the $30 all-cash bid from Paramount Skydance, which WBD’s board rejected in December.
The release from Ancora recycles many of Paramount’s main arguments against the Netflix deal: it’s an inferior proposal to begin with, and faces a difficult, if not impossible, regulatory review process. Ancora says that Paramount’s offer “includes significantly more cash,” and also points approvingly to Paramount’s history as a legacy studio.
The $200 million interest in WBD is meaningful, but still represents less than 1% of the company’s roughly $69 billion market value. Still, if it causes other investors to begin breaking ranks with the Netflix deal, it could begin an avalanche of defections that eventually quashes the agreement.
There’s a long way to go until that happens, however, and Netflix has shown an increasing willingness to go on the offensive to promote its bid. Recently, Netflix executive Clete Williams pointed out that Paramount’s acquisition of WBD would likely lead to billions of dollars in job cuts.
Paramount recently added a new fee for WBD investors to its $30-per-share offer for the company, but only time will tell if it sways any more shareholders to its side. Ancora Holdings is clearly onboard with Paramount, however, and will do its best to convince other WBD investors to abandon their support of Netflix’s takeover attempt.
Netflix
Netflix is a leading subscription-based video streaming service that offers on-demand access to an extensive library of over 3,000 movies, 2,000+ TV shows, and a growing collection of acclaimed Netflix originals. Renowned for producing groundbreaking content, Netflix has become a cultural powerhouse with hit originals like “Stranger Things,” “Wednesday,” “Squid Game,” “The Crown,” “Tiger King,” “Bridgerton,” “The Witcher,” and “Black Mirror.”