In Major Twist, Paramount Makes $108.4bn Hostile Bid for Warner Bros

•We will review proposal within 10 days, says company

•Trump’s comments raise doubts over Netflix’s $72bn offer

Emmanuel Addeh in Abuja

Paramount Skydance yesterday launched a hostile bid worth $108.4 billion for Warner Bros Discovery  in a last-ditch effort to outbid Netflix and create a media powerhouse that would challenge the dominance of the streaming giant.

Netflix had emerged victorious on Friday from a weeks-long bidding war with Paramount and Comcast, securing a $72 billion equity deal for Warner Bros Discovery’s TV, film studios and streaming assets. But Paramount’s latest attempt means the jockeying for Warner Bros and its prized HBO and DC Comics assets will not come to a conclusion swiftly.

Paramount argued that its $30-per-share, all-cash offer for the entirety of Warner Bros Discovery is superior to Netflix’s bid, providing shareholders $18 billion more in cash and an easier path to regulatory approval. It also argued that the combination of Paramount and Warner Bros would be in the best interest of the creative community, movie theatres and consumers, who would benefit from enhanced competition.

“We believe our offer will create a stronger Hollywood,” Paramount CEO David Ellison said in a statement reported by Reuters.

Netflix’s offer comes with a $5.8 billion break-up fee and was likely to face strong antitrust scrutiny; U.S. President Donald Trump raised questions about the offer over the weekend. The bid has already drawn sharp criticism from bipartisan lawmakers and Hollywood unions over concerns that it could lead to job cuts as well as higher prices for consumers.

Shares of Paramount were up 3.7 per cent in morning trading following the company’s bid. Warner Bros Discovery jumped 6.7 per cent, while Netflix shares fell 3.6 per cent.

However, Paramount’s bid could also face its own level of scrutiny. A Paramount-Warner Bros combination would boost its dominant position in the studio business that some also worry could lead to job losses as the industry rapidly consolidates.

Reuters had already reported, citing sources familiar, that Paramount had raised its offer to $30 per share on Thursday for the entire company, but that the Warner Bros board had concerns about the financing.

In its appeal to shareholders, Paramount said it submitted six proposals over the course of 12 weeks, but Warner Bros Discovery “never engaged meaningfully” with these proposals. The $30 cash offer represents a 139 per cent premium over the company’s undisturbed stock price, and bests Netflix’s $27.75 offer that mixes cash and stock.

“The Warner Bros Discovery acquisition is far from over. Netflix is in the driver’s seat but there will be twists and turns before the finish line. Paramount will appeal to shareholders, regulators, and politicians to try to stymie Netflix. The battle could become prolonged,” said eMarketer senior analyst Ross Benes.

Paramount submitted multiple offers starting in September to forge an entertainment powerhouse capable of challenging Netflix and tech giants such as Apple that have expanded into media but faced rejections.

The studio argued that the combination of its Paramount+ streaming service with Warner Bros’ HBO Max would position it for growth, and create a meaningful competitor to Netflix, Amazon Prime Video or Walt Disney’s Disney+ — offering consumers more choice.

Paramount maintained that it would be a champion of Hollywood and its talent, and would remain committed to releasing movies in theaters, and would continue to do so if combined with Warner Bros.

Warner Bros’ television networks, which include CNN and TNT, would be in a stronger position, when united with Paramount’s television portfolio, the studio argued. It had sent a letter to Warner Bros, questioning the sale process and alleging the company had abandoned a fair bidding process and predetermined Netflix as the winner.

That followed reports that Warner Bros’ management called the Netflix deal a “slam dunk” while speaking negatively about Paramount’s offer.

In an interview with CNBC on Monday, Paramount CEO David Ellison said there is an “inherent bias” against his company in the bidding. “We will be the largest investor in this deal. We’re literally sitting here today because we are fighting for our shareholders, and we’re also fighting for the shareholders of Warner Bros Discovery,” Ellison said in an interview with CNBC.

But Warner Bros, responding to Paramount Skydance’s unsolicited takeover offer to acquire all of WBD’s outstanding stock for $30/share, said it will review the proposal and issue its decision within 10 business days.

For now, the WBD board “is not modifying its recommendation with respect to the agreement with Netflix,” the company said in a statement Monday.

Meanwhile, Netflix’s $72 billion Warner Bros deal led to several price target cuts by Wall Street analysts as U.S. President Donald Trump warned of market-share concerns, underscoring the tough scrutiny that the acquisition is likely to face.

The deal that combines the world’s largest streaming service with HBO Max and a major Hollywood studio has also drawn criticism from bipartisan lawmakers and unions on concerns it could lead to job cuts and higher prices for consumers.

Trump warned on Sunday while speaking at the Kennedy Center that the combined group’s enlarged market share “could be a problem” and that he will be involved in the decision.

White House economic adviser Kevin Hassett told CNBC on Monday that the U.S. Justice Department would examine the deal’s impact for “quite a while.”

Netflix has agreed to a $5.8 billion termination fee if it cannot obtain regulatory approval, in a sign of confidence of a greenlight.

To ease concerns of market concentration, it is likely to argue that the market for online video also includes YouTube and TikTok – two of the most popular platforms with hundreds of millions of users.

“Antitrust opposition stalls consummation of the deal for a couple of years, and raises at least an element of risk about completion,” said Rosenblatt analyst Barton Crockett. Hollywood unions have voiced concerns about increased market concentration, reduced film output and the potential for higher consumer costs.