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Summary
Paramount’s hostile bid for Warner Brothers Discovery has stunned its CEO-approved suitor Netflix and left Hollywood agog. Given its political contours, this buy-out may pivot on which of the two rival suitors charms the target’s shareholders.
A hostile bid for a company may sound ominous, but it’s usually a scare only for its management. So too in the case of US-based film studio Paramount’s offer this week to buy all of Warner Brothers Discovery (WBD) for $108 billion in cash.
It was made directly to the acquisition target company’s shareholders over the heads of its top managers, who had struck a deal with web-streamer Netflix, which seemed all set to buy WBD’s film studio and streaming units for $83 billion in cash and stock.
Paramount’s “hostility” is good for WBD’s stock owners, who might benefit from a bidding war with the two rival suitors vying for their votes. Financially, analysts place both the offers roughly at par, given the difference in what’s being eyed.
Some WBD shareholders may want to take US politics into account, as Paramount has links with the Republican party and antitrust scrutiny could come into play.
Shareholders could also view it as another sort of choice: either a slice of Netflix enriched with WBD’s movies (plus online reach) or support for a challenge to Netflix’s web leadership. Money matters. Yet, this buy-out could pivot on the corporate charm of Netflix vis-à-vis Paramount.
English (US) ·