WBD board recommends rejection of Paramount’s takeover bid
WBD board recommends rejection of Paramount’s takeover bid
As expected, WBD’s board members were united in their message to shareholders: go with Netflix.
Since Warner Bros. Discovery officially accepted a near-$83 billion bid to sell its streaming and studio segments to Netflix, Paramount Skydance has pulled out all the stops to try to acquire the company by any means necessary. Paramount is in the midst of a hostile takeover attempt, but WBD’s board of directors united to direct the company’s shareholders to reject Paramount’s last bid once and for all.
Key Details:
- So say we all: WBD’s board has unanimously recommended shareholders reject Paramount’s hostile takeover offer.
- No mincing words: The letter to shareholders calls Paramount’s offer “inadequate,” and “inferior” to Netflix’s bid.
- We’re out: The missive comes as Paramount is grappling with the loss of a key financing partner in its attempt.
Every member of the WBD board supported the opinion that Netflix continued to present the best offer for the company’s assets in a letter to all investors. The communication argues that the Paramount offer includes “significant risks,” and that the Ellison family has not provided a full equity backstop for its offer, despite numerous claims to the contrary.
The letter also defends WBD’s actions during the merger, saying that it has been fair and transparent throughout the process. The letter essentially makes a point-by-point refutation of the communication sent by Paramount Skydance CEO David Ellison to WBD’s shareholders urging them to get on board with its hostile takeover attempt.
WBD board chair Samuel A. Di Piazza, Jr said:
“Following a careful evaluation of Paramount’s recently launched tender offer, the Board concluded that the offer’s value is inadequate, with significant risks and costs imposed on our shareholders. This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals. We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination.”
Paramount has maintained that it can pay more for WBD than Netflix can, with an offer ostensibly worth $30 per share currently on the table. However, the offer Paramount is using to move forward with its hostile takeover attempt is now missing a key funding partner. Presidential son-in-law Jared Kushner’s Affinity Partners had been lined up to help finance the offer, but it officially dropped its pledge of funds on Tuesday.
That will likely give WBD shareholders even more pause as they read the letter from their board of directors urging rejection of the Paramount offer. As each day goes by, Paramount appears farther and farther away from an acquisition of WBD, while Netflix looks primed to seal the deal and move into the next phase of the transaction: the regulatory process.
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