WBD board reportedly set to reject Paramount’s $108bn hostile takeover bid 

David Zaslav (left) and David Ellison

Warner Bros Discovery (WBD)’s board is set to recommend that shareholders reject Paramount’s US$108.4bn hostile takeover bid, according to a report in Bloomberg.

The business publication said on Tuesday that WBD continues to believe Netflix’s bid, which values the company’s studios and streaming assets at US$82.7bn (including around US$10bn in debt), would create more value for shareholders.

Bloomberg also said WBD has concerns about the financing behind Paramount’s bid, which includes US$12bn from the Ellison family and US$24bn from Middle Eastern wealth funds. On Tuesday, it was also revealed that Affinity Partners, the company led by US president Donald Trump’s son-in-law Jared Kushner, would no longer be part of Paramount’s bid.

Ellison previously indicated that the all-cash US$108.4bn bid is not its “best and final,” and the company is expected to go higher if WBD ultimately rebuffs this latest attempt. WBD, which is led by president and CEO David Zaslav, said on December 8 it would respond to Paramount’s offer within 10 business days.

Paramount has made multiple offers for the entirety, both before and after the formal bidding process began on December 1. In all cases, those bids have been rejected, prompting Paramount CEO and chairman David Ellison to last week send a letter to WBD shareholders arguing why it is making a better offer than Netflix.

In the letter, Ellison doubled down on the accusation that WBD has led a “murky” sale process, designed from the outset to favour Netflix. He also claimed Paramount, which is backed by the world’s second-richest person, Larry Ellison, had “air-tight financing” and an easier path to regulatory approval. Elsewhere in the letter, he claimed Netflix’s deal was a “blatant attempt to eliminate” an international streaming competitor, in HBO Max, and that a combined Paramount-WBD would spend far more on content than a combined Netflix-WBD.

WBD’s reported rejection of the bid came on a challenging day for Paramount, as Trump appeared to take a swipe directly at the Ellisons over coverage in CBS News series 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. If they are friends, I’d hate to see my enemies!”

Those comments come less than two weeks after Trump somewhat unexpectedly sung the praises/ of Netflix co-CEO Ted Sarandos, but noted that a Netflix-WBD tie-up “could be a problem” in the view of anti-trust regulators. He also said he would be “involved” in the decision over whether or not the deal is approved.