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Washington: Paramount has lodged a $US108 billion ($163 billion) hostile takeover bid for Warner Bros, including its film studio and streaming brands, upsetting a seemingly done deal that would have seen Netflix buy the company following a months-long bidding war.
Paramount Skydance is offering Warner Bros shareholders $US30 cash a share in a deal that includes finance from numerous Middle Eastern sources, as well as Affinity Partners, the investment firm owned by President Donald Trump’s son-in-law, Jared Kushner.
Jared Kushner, Donald Trump’s son-in-law, is part of the hostile takeover bid for Warner Bros.Credit: AP
Those partners agreed to forgo any governance rights, including board representation, associated with their investments, Paramount said in a filing with the Securities and Exchange Commission.
“We’re really here to finish what we started,” Paramount chief executive David Ellison told CNBC on Monday morning, New York time. “Our deal is pro-consumer it’s pro-creative talent, it’s pro-competition.”
In a separate statement, Ellison said: “We believe our offer will create a stronger Hollywood. It is in the best interests of the creative community, consumers and the movie theatre industry.”
Netflix prevailed last week with a $US72 billion offer for Warner Bros Discovery – which owns industry darling HBO – in a seismic deal that would see the movie and television giant acquired by one of its biggest customers to create a powerhouse media conglomerate.
Donald Trump and first lady Melania Trump arriving at the Kennedy Centre Honours.Credit: AP
Trump raised doubts about the Netflix deal when he appeared at a Kennedy Centre awards function on Sunday night. The combined market share of the new company could breach antitrust guidelines and see the deal come under Department of Justice review.
“They have a very big market share, and when they have Warner Bros, that share goes up a lot,” Trump said.
“So, I don’t know. That’s going to be for some economist to tell, and I’ll be involved in that decision, too. But it is a big market share, there’s no doubt about that. It could be a problem.”
Paramount said its decision to go hostile came after it made several earlier bids that Warner management “never engaged meaningfully” with following the company’s October announcement that it was open to selling itself.
Warner Bros. Studios in Burbank, California.Credit: Bloomberg
In its appeal to shareholders, Paramount noted its offer also contained $US18 billion more cash than Netflix’s bid, and argued that it was more likely to pass antitrust scrutiny from the Trump administration.
Paramount would also buy Warner Bros’ cable networks CNN and Discovery – assets Netflix did not want, and which were not part of its offer.
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The offer says 100 per cent of the $US40.7 billion in required equity capital is backstopped by the Ellison family – “one of the wealthiest families in the world” – and RedBird Capital, a part-owner of Paramount Skydance.
The Ellison family is close to Trump, particularly patriarch mega-billionaire Larry Ellison, the founder of tech firm Oracle and a Republican mega-donor. He was at one point the world’s richest man.
Paramount agreed to pay Trump $US16 million this year over a 2024 interview with then vice president Kamala Harris on the program 60 Minutes – carried by its network CBS – which Trump sued over, claiming the package was misleadingly edited.
Weeks later, the federal communications regulator approved an $US8 billion merger between Paramount and Skydance.
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The bid for Warner Bros comes on the heels of Paramount’s October purchase of the news and commentary website The Free Press. Paramount then installed the site’s founder, Bari Weiss, as the editor-in-chief of CBS News, saying it believes the country longs for news that is balanced and fact-based.
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