Paramount Skydance Extends Takeover Offer for Warner Bros. Discovery, But No Price Increase: Sources
David Ellison, the CEO of Paramount Skydance, is standing firm against David Zaslav's aggressive tactics. The initial deadline for Warner Bros. Discovery shareholders to accept Ellison's 'hostile' offer has been extended to January 21st, but the price per share remains at $30, according to On The Money's sources.
On Tuesday, Zaslav, CEO of Warner Bros. Discovery, boasted about Netflix's all-cash bid of $72 billion for his company's studio and streaming service, which was accepted. He then attempted to pressure Ellison by accelerating the shareholder vote on the Netflix deal to February, compared to the original May date. This move was seen as a direct challenge to Ellison's offer.
An insider close to Zaslav's strategy stated, 'No more games. Either bring more money to the table or leave.' However, Ellison, alongside his father, tech tycoon Larry Ellison, and RedBird Capital's Gerry Cardinale, are not backing down. They plan to extend the January 21st 'tender deadline' to give shareholders more time to consider their offer.
The lawsuit filed by Ellison's team aims to prove that Zaslav's bidding process was unfair, influenced by his friendship with Netflix CEO Ted Sarandos. The exact duration of the deadline extension is uncertain.
One deal insider described the negotiations as tense, indicating no new financial incentives are being offered. However, Paramount Skydance has internal plans to increase the bid to $33 per share, totaling around $80 billion. This higher offer would be challenging for Netflix to match, given its recent all-cash bid of $27.75 per share, plus $3 for WBD's cable properties, which some investors doubt can be sustained due to declining cable TV audiences.
Netflix has already lost nearly $170 billion in market value since the summer as investors question its spending on non-core assets. Ellison and Cardinale believe their $30 per share offer is superior and that Netflix faces significant regulatory hurdles.
As of the latest reports, Ellison and Cardinale are returning from meetings with European and UK regulators, who are more receptive to their deal. The streaming industry's antitrust concerns over Netflix's market dominance are a key factor in this dynamic.
Larry Ellison's friendship with President Trump, who has expressed interest in the deal's approval, adds another layer of complexity. Some Paramount Skydance executives suggest they might wait for a more favorable regulatory environment, but Wall Street bankers doubt this will happen on Zaslav's timeline.
