WBD closes well below Paramount Skydance's $30 all-cash bid
In trading on Monday, shares of Warner Bros. Discovery rose $1.15 to $27.23, up 4.41% on the day. Paramount Skydance's bid will pay Warner Bros. Discovery shareholders $18 billion more cash than the deal from Netflix. Not only did Paramount make this clear while talking up its bid, it also said that its deal is better for the creative community and will have an easier time getting regulatory approval.
Who do you want to see buy Warner Bros. Discovery?
I'd like to see Netflix purchase WBD.
0%
I'd prefer that Paramount Skydance wins the battle.
63.64%
I want neither to close on the transaction.
36.36%
However, unlike a Netflix purchase of Warner Bros. Discovery, which doesn't need approval from the FCC, a Paramount Skydance transaction would include the Paramount-owned CBS and the CBS-owned local stations. As a result, the FCC and FCC Chairman Brendan Carr will have to approve the transaction along with the Department of Justice (DOJ), and possibly the Federal Trade Commission (FTC). Whenever broadcast licenses are involved in a potential deal, the FCC must give its blessing,
Paramount Skydance's proposed deal includes the acquisition of cable channels including TNT and CNN
Paramount Skydance's deal includes the purchase of the Warner Bros. movie studio, the cable channel HBO, streaming service HBO Max and a portfolio of cable channels including TNT and CNN. Netflix's transaction does not include the cable networks, which would be spun off as part of a new company called Discovery Global.
Cable channel CNN is part of the Paramount Skydance deal while Netflix would spin it off if it wins WBD. | Image credit-CNN
Paramount CEO David Ellison said that his deal "provides a superior alternative to the Netflix transaction. WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company. Our public offer, which is on the same terms we provided to the Warner Bros. Discovery Board of Directors in private, provides superior value, and a more certain and quicker path to completion."
President Trump could favor the Paramount Skydance offer over the Netflix bid
Earlier this year, David Ellison's Skydance purchased Paramount in an $8 billion trade. His father is Larry Ellison, the founder, Executive Officer, and Chief Technical Officer of Oracle. Larry is close to President Donald Trump which means that getting FCC approval for a Paramount Skydance purchase would be a fait accompli. On Sunday, before Paramount Skydance announced its bid for Warner Bros. Discovery, President Trump said the Netflix bid could be an antitrust "problem." Trump said that he will "be involved" in the approval process for a Netflix-WBD transaction.
Paramount Skydance has funding commitments for $54 billion, equal to half of the total cost of the deal
Shortly after the deal was announced David Ellison appeared on CNBC. Talking about Netflix, Ellison said "When you combine the number one streamer with the number three streamer, that creates a company that has unprecedented market power, north of 400 million subscribers. The next largest competitor is Disney, with just under 200 million. That's bad for Hollywood. We believe we have the superior offer; we're taking that directly to shareholders and we think that's what they're going to vote for."
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Netflix is in line to receive a $2.8 billion breakup fee if Warner Bros. Discovery backs out of the transaction it agreed to with Netflix and agrees to the higher bid from Paramount Skydance. Importantly, Paramount already has funding commitments for $54 billion, half of the purchase price, from Bank of America, Citi, and private equity firm Apollo Global.
Alan, an ardent smartphone enthusiast and a veteran writer at PhoneArena since 2009, has witnessed and chronicled the transformative years of mobile technology. Owning iconic phones from the original iPhone to the iPhone 15 Pro Max, he has seen smartphones evolve into a global phenomenon. Beyond smartphones, Alan has covered the emergence of tablets, smartwatches, and smart speakers.
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