Natalie Shermanbusiness reporter
warner bros discoveryParamount Skydance has made another offer to buy Warner Bros Discovery, hoping to outbid Netflix’s competing plans to buy the company’s studio and streaming network.
Paramount, backed by the billionaire Ellison family, said it would offer $30 (£22.50) per share directly to shareholders to acquire all of Warner Bros., including its traditional television networks.
Netflix said its proposal was a “superior alternative” to Netflix’s, which would give shareholders more cash up front and be more likely to be approved by regulators.
President Donald Trump said there “could be problems” with the Netflix acquisition, noting there were concerns about competition given the company’s size.
Paramount is a smaller player than Netflix, known for brands like CBS News, Nickelodeon, and Mission Impossible.
It began submitting offers months ago, and eventually Warner Bros., owner of HBO and classics from Looney Tunes to Harry Potter, officially began the bidding process.
Wall Street analysts have long said they believe a Paramount-Warner Bros. combination makes sense because it would give the company the scale to compete with rivals such as Netflix and Disney.
Paramount was also seen as a strong suitor because Trump’s ties to the Ellison family, which includes tech billionaire and Republican megadonor Larry Ellison, were expected to help ease the approval process.
But Warner Bros. declared Netflix the winner of the auction on Friday, announcing a deal that values its studios, including HBO, and the streaming network at about $83 billion (£62.3 billion) including debt.
It said the sale would come after other parts of the Warner Bros. business, including CNN, were scheduled to be spun off into independent companies.
Paramount’s offer values the entire company at $108.4 billion, which it said is a better deal. Trump’s son-in-law, Jared Kushner, is one of the financial partners Paramount is working with as part of the deal, according to a filing with the Securities and Exchange Commission.
Netflix executives on Monday expressed confidence in their plans, dismissing Paramount’s attempt as “totally expected.”
Warner Bros. said it would review the suggestions but would not change its current recommendations. They said they would respond within 10 business days.
either one The acquisition is expected to be investigated by U.S. and European competition regulators.
Analysts said Netflix’s plan is likely to raise concerns about its dominance in streaming, while Paramount’s proposal would trigger a review of the impact on advertisers and local TV distributors given the combined company’s power over sports and children’s networks.
Paramount’s plan to keep CBS and CNN under the same parent company has also been closely watched because of the potential impact on its news business and the Ellisons’ relationship with Trump.
The president said he expected to participate in the approval process over the weekend.
But he offered little certainty about his views.
He pointed out potential concerns about Netflix’s partnership on Sunday while also praising the streamer’s bosses. Meanwhile, he took aim at Paramount on social media Monday, conducting a televised 60 Minutes interview with Republican Rep. Marjorie Taylor Greene, a former Trump ally.
Paramount CEO David Ellison told CNBC he had a “great conversation” with President Trump about the deal, but said he did not want to speak on the president’s behalf.
Netflix is the world’s largest streaming company with over 300 million subscribers.
Mr. Ellison’s plan was to buy Paramount earlier this year and turn it into a Skydance film studio.
“Paramount ultimately needs this deal more than Netflix,” said Ben Barringer, head of technology research at Quilter Cheviot, adding that the Warner Bros assets are simply “a nice-to-have” for the streamer.
In an interview with CNBC on Monday, Ellison talked about the benefits of his plan for the entire media industry, arguing that Netflix’s acquisition of Warner Bros. Discovery would give one company too much power over actors and other players in the industry.
“It’s a terrible deal for Hollywood,” he said.
He also said he thought Warner Bros.’ plan to spin off its traditional networks into independent companies would cause it to fail and ultimately be a mistake for shareholders.
“I think the value (of the stock) is probably a lot lower than people are claiming,” he said.
But at a business conference call on Monday, Netflix executives said they were confident they could get approval for the acquisition, noting that their acquisition plans did not include plans for major cuts.
Shares of Warner Bros. rose more than 4% on Monday and Paramount shares rose 9%.
However, Netflix stock price fell more than 3%.
