Paramount launches $108bn hostile bid for Warner Bros. Discovery

The hostile bid launched this week by Paramount to acquire Warner Bros. Discovery (WBD) has opened a fresh battle in the streaming and media sector, pitting Paramount against Netflix and raising the prospect of further industry concentration in the United States.

Paramount’s offer, valued at about $108 billion, tops a previously agreed deal under which Netflix would buy WBD for $82.7 billion including debt. Paramount is proposing $30 per share in cash, compared with Netflix’s $27.75 per share. Netflix has said it remains “superconfident” it will close the previously negotiated transaction.

The outcome now hinges on WBD shareholders and U.S. regulatory approvals. Shareholders would have until January 8 to decide whether to accept Paramount’s proposal. If Paramount prevails, the deal would create a more integrated media conglomerate combining film production, streaming, cable channels and news assets, increasing its market influence. If Netflix keeps its agreement, it would bolster its content library with historic Warner franchises, although that transaction would not include Warner’s cable channels.

Paramount’s hostile bid is supported by sovereign and private investors from Saudi Arabia, Qatar and Abu Dhabi, who would provide part of the roughly $41 billion in required equity, alongside about $54 billion in debt financing arranged with U.S. banks. Jared Kushner’s investment firm, Affinity Partners, is also reported to be participating.

Netflix could revise its offer to make it more competitive, but the likelihood that WBD would withdraw its existing support is limited because the companies already have a preliminary agreement. In a hostile approach, however, an outside bidder presents an offer directly to shareholders, who ultimately decide whether to sell.

Any resulting transaction would require acceptance by a majority of voting shareholders and must pass regulatory scrutiny on competition and national security grounds in the United States.