Paramount Outbids Netflix in Bid War in ‘Hostile Takeover’
Paramount Skydance, simply known as Paramount, raises $108.4 billion, which is $25.7 billion more than what Netflix, in the WBD bid war. All this is to be paid in cash.
Even though Netflix is involved in a bidding war with two other networks, Warner Bros. Discovery has an obligation to choose the best deal of all.
The Warner Bros. Discovery Race
Netflix, which is already a giant in the industry, is making waves as entertainment bodies and the public are critical of how much power the potential purchase of WBD would confer.
Still, it is anyone’s game. Netflix can leverage a higher amount than Paramount, Skydance, or Comcast. Or the other bidders can overtake the two finalists totally.
Unlike Netflix, Paramount is offering directly to shareholders, while Netflix took a different approach and appealed to the WBD board of directors.
Paramount Skydance vs. Netflix
Paramount took this hostile approach after being rejected at first. This comeback outshines Netflix’s offer of $27.75 per share by an increment of $2.25, which puts Paramount at $30 per share.
It is a tricky decision for Warner Bros., as choosing Paramount over Netflix will incur the company a $2.8 billion breakup fee, which can be easily covered from the gross cash earnings from Paramount Skydance’s bid.
No more cinema?
The competitive bid did not move Netflix co-CEO Ted Sarandos, and he is extremely confident that his company’s 82$ billion deal will take. Netflix is revered as the No. 1 streaming service worldwide; if HBO (which is 3rd in that order) becomes one of its assets, what does that mean for entertainment as a whole?
Paramount CEO David Ellison stated that it would be bad for business. He pointed out the Hollywood movie industry as we know it. On the WBD-Netflix deal, Ellison had this to say:
It’s bad for the consumer, it’s bad for the creative community… We’re sitting here trying to save it”
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