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Warner Bros. is telling shareholders to reject a takeover bid from Paramount Skydance, saying that a rival bid from Netflix will be better for customers.
“We strongly believe that Netflix and Warner Bros. joining forces will offer consumers more choice and value, allow the creative community to reach even more audiences with our combined distribution and fuel our long-term growth,” Warner Bros. said Wednesday.
“We made this deal because their deep portfolio of iconic franchises, expansive library and strong studio capabilities will complement — not duplicate — our existing business.”
Paramount went hostile with its bid last week, asking shareholders to reject the deal with Netflix favoured by the board of Warner Bros.
Paramount is offering $30 US per Warner share to Netflix’s $27.75 US.
Paramount’s bid isn’t off the table altogether. While Wednesday’s letter to shareholders means Paramount’s is not the offer favoured by the board at Warner Bros., shareholders can still decide to tender their shares in favour of Paramount’s offer for the entire company — including cable stalwarts CNN and Discovery.
Unlike Paramount’s bid, the offer from Netflix does not include buying the cable operations of Warner Bros. An acquisition by Netflix, if approved by regulators and shareholders, will close only after Warner completes its previously announced separation of its cable operations.
Takeover bids face regulatory scrutiny
Paramount has claimed it made six different bids that the Warner leadership rejected before announcing its deal with Netflix on Dec. 5. Only after that did it take its offer directly to Warner’s shareholders.
“The board reviewed Paramount Skydance’s most recent unsolicited tender offer with the same care and discipline it has applied throughout this process, including its review of multiple prior proposals,” Warner Bros. said in its statement.
“The board’s evaluation followed a thorough and consistent process and is grounded in its fiduciary duties.”
Beyond a greenlight from shareholders, both takeover bids face tremendous regulatory scrutiny. A change in ownership at Warner would drastically reshape the entertainment and media industry — impacting movie-making, consumer streaming platforms and, in Paramount’s case, the news landscape.
Critics of Netflix’s deal say that combining the massive streaming company with Warner’s HBO Max would give it overwhelming market dominance, whereas the Paramount+ streaming service is far smaller.
“This is something that we’ve heard for a long time — including when we started the streaming business,” Warner Bros. said in a securities filing on Wednesday. “Our stance then and now is the same — we see this as a win for the entertainment industry, not the end of it.”
Paramount Skydance made a hostile takeover bid for Warner Bros. Discovery for $108 billion US just days after Netflix announced it made a $72-billion US deal with the legacy studio. It’s a move that even has U.S. President Donald Trump weighing in.
Bids from both Netflix and Paramount have raised alarm for what they could mean for film and TV production. While Netflix has agreed to uphold Paramount’s contractual obligations for theatrical releases, critics have pointed to its past business model and reliance on online releases. Yet Paramount and Warner Bros. are two of the “big five” legacy studios left in Hollywood today.
Paramount’s attempt to buy Warner’s cable networks and news business would also bring CBS and CNN under the same roof. In addition to further accelerating media consolidation, that could raise questions about shifts in editorial control — as seen at CBS News both leading up to and following Skydance’s $8 billion US purchase of Paramount, which it completed in August.
U.S. President Donald Trump has already been vocal about his future involvement in the deal, indicating that politics will play a role in regulatory approval.
Trump previously said that Netflix’s deal “could be a problem” because of the potential for an outsized control of the market. The Republican president also has a close relationship with Oracle’s billionaire founder Larry Ellison, who is the father of Paramount’s CEO, whose family trust is also heavily backing the company’s bid to buy Warner.
Affinity Partners, an investment firm run by Trump’s son-in-law Jared Kushner, previously said it would be investing in the Paramount deal, too. But on Tuesday, the firm announced that it would be dropping out of the bid.
Still, Trump also has a tendency to make decisions based on gut and his personal mood. He has continued to publicly lash out at Paramount over editorial decisions at CBS’s 60 Minutes.
“For those people that think I am close with the new owners of CBS, please understand that 60 Minutes has treated me far worse since the so-called ‘takeover,’ than they have ever treated me before,” Trump wrote on his Truth Social platform on Tuesday. “If they are friends, I’d hate to see my enemies!”
