Paramount Launches Hostile Bid for Warner Bros Discovery at $30

Paramount Skydance has launched a hostile takeover bid for Warner Bros Discovery, offering shareholders $30.00 per share in an all-cash tender offer, valuing the company at approximately $108.4 billion. This strategic move comes just days after Netflix announced its own acquisition of Warner Bros Discovery for $27.75 per share, amounting to $82.7 billion. The bid has introduced a dramatic twist in the ongoing negotiations within the media industry.

On December 8, 2023, Paramount directly approached the shareholders of Warner Bros Discovery with its proposal, which would encompass the entire company, including both Warner Bros and Discovery assets. In contrast, the Netflix agreement only pertains to Warner Bros, leaving the Discovery side—comprising networks such as CNN and TNT—to be spun off into a separate public entity.

David Ellison, chairman and CEO of Paramount, emphasized the advantages of their offer, stating, “WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company.” He criticized the Netflix proposal as lacking value and presenting potential risks, particularly concerning future trading values and regulatory hurdles.

The Paramount offer is classified as hostile because the board of Warner Bros Discovery has already agreed to the Netflix deal. However, since the shareholders have not yet approved it, Paramount aims to leverage this moment to present a more attractive option. Shareholders have until January 8, 2026, to respond to the tender offer. Should a majority accept, the board would likely be compelled to reconsider its stance.

Reactions in the stock market indicate a mixed sentiment among investors. Following the announcement of Paramount’s bid, its shares rose by approximately 10% to around $14.70. Warner Bros Discovery’s stock also saw an increase of about 4%, reaching roughly $27 per share. Conversely, Netflix shares dipped by around 4%, falling to approximately $96 per share.

While analysts largely regard Netflix as a consensus buy, with a median price target of $139.50 per share—which suggests a potential 45% upside—some have expressed concerns regarding the risks associated with its acquisition of Warner Bros. The recent selloff of Netflix shares may present a buying opportunity for investors, but they are advised to remain vigilant as this situation develops.

As both Paramount and Netflix navigate this competitive landscape, the outcome remains uncertain. The stakes are high, both for shareholders and the broader entertainment industry, as these major players vie for dominance in the evolving media landscape.