Paramount Skydance starts a hostile purchase offer Warner Bros. Discovery after it lost Netflix in a months-long bidding war for the old systems, the company announced on Monday.
Paramount will make a direct cash offer of $30 per share to WBD shareholders. That’s the same offer WBD rejected last week and represents an enterprise value of $108.4 billion.
The offering will be backed by equity financing from the Ellison family and private equity firm RedBird Capital, as well as $54 billion in debt commitments from Bank of America, Citi and Apollo Global Management, Paramount said in a news release.
Part of the equity financing comes from external financing partners in the Middle East, including Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’imad Holding Company PJSC and the Qatar Investment Authority. Another part comes from Jared Kushner’s Affinity Partners. Kushner is the son-in-law of US President Donald Trump.
These partners have agreed to waive “any governance rights, including board seats,” as part of their non-voting equity stake, Paramount said in a filing. The changes allow the deal to fall outside the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS).
Shares of Paramount rose 7% in morning trading on Monday. Shares of Warner Bros. Discovery rose about 5%, while Netflix fell more than 4%.
“We’re really here to finish what we started,” Paramount Skydance CEO David Ellison told CNBC’s “Squawk on the Street” on Monday. “We brought the company into play.”
Paramount Skydance began searching for Warner Bros. Discovery in September, submitting three offers before WBD began a formal sales process that eventually attracted additional suitors.
On Friday, Netflix announced a deal to acquire WBD’s studio and streaming assets for a combination of cash and stock worth $27.75 per WBD share, or $72 billion. Paramount had bid for all of Warner Bros. Discovery, including those assets and the company’s television networks such as CNN and TNT Sports.
“We’re on Wall Street, where cash is still king. We’re offering shareholders $17.6 billion more cash than the deal they currently have with Netflix, and we believe they’ll vote for it when they see what’s currently in our offer,” Ellison said.
Ellison said Monday that he puts a $1 per share value on Linear Cable’s assets, which will begin trading as a separate public entity called Discovery Global in mid-2026. WBD executives have privately valued the assets at about $3 per share.
Paramount has repeatedly argued to the WBD board that it is in the best interest of its shareholders to preserve Warner Bros. Discovery as a whole.
Paramount made an offer on Dec. 1 and heard from WBD that it needed to make certain changes to the offer, Ellison said Monday. When Paramount made the changes and increased its offer to $30 a share, Ellison never heard from WBD CEO David Zaslav, he said.
Ellison said he told Zaslav via text message that $30 per share was not the company’s best and final offer, suggesting the company was willing to bid even higher.
Ellison argued that Paramount’s deal would require a shorter regulatory approval process given the company’s smaller size and friendly relationship with the Trump administration. He called Trump a “competition believer” and said Paramount’s merger with WBD will be “a real competitor to Netflix, a real competitor to Amazon.”
Ellison also expressed doubts about Netflix’s chances of getting regulatory approval.
“Combining the No. 1 streaming service with the No. 3 streaming service is anti-competitive,” Ellison said.
CNBC reported Friday that the Trump administration viewed the deal with “great skepticism,” and Trump said Sunday that market share considerations could pose a “problem.”
Netflix agreed to pay Warner Bros. Discovery $5.8 billion if the deal is not approved, according to a Securities and Exchange Commission filing Friday. Warner Bros. Discovery said it would pay a $2.8 billion breakup fee if it decides to abandon the deal and pursue another merger.
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