US production company Paramount said on Monday it intends to challenge Netflix’s acquisition of Warner Bros. Discovery with a hostile bid of its own.
Netflix struck a $72 billion takeover deal with Warner Bros. on Friday, but Paramount said it would approach shareholders with a bid of about $74.4 billion, or $30 per share in cash.
Additionally, unlike Netflix, Paramount says it is also offering to buy Warner Bros.’ cable properties, and is asking shareholders to reject Netflix’s bid, which it says is based on a “misleading prospective valuation” of those properties.
Paramount criticized the Netflix offer, saying, “It exposes WBD shareholders to a complex and volatile mix of equity and cash and a lengthy multi-jurisdiction regulatory approval process with an uncertain outcome.”
Paramount said it submitted six proposals to WBD over a 12-week period.
“We believe our proposal will create a stronger Hollywood. It is in the best interests of the creative community, consumers and the movie theater industry,” Paramount Chairman and CEO David Ellison said in a statement.
“We believe they will benefit from increased competition, higher content spend and theatrical release output and a greater number of films in theaters as a result of our proposed transaction,” he said.
What did Trump say on the deal?
US President Donald Trump also said on Sunday that the Netflix deal “could be a problem” because of the size of the combined market share.
The President said he would be personally involved in the federal government’s decision on whether to approve the bid.
Given Trump’s personal relationship with Paramount — CEO Ellison is the son of longtime Trump supporter Larry Ellison, the world’s second-richest person — the president’s skepticism about Netflix was understandable.
“He said he would take the decision that we should take him at face value,” said Usha Haley, a Wichita State University professor who specializes in international trade strategy.
“For them, it’s more control over the media.”
Edited by: Jennifer Cimino Gonzalez