Paramount is now pursuing a hostile takeover of Warner Bros. Discovery, announcing Monday that it will take its bid directly to shareholders.
Paramount announced Monday that it will take its all-cash, $30/share bid for the entirety of Warner Bros. Discovery directly to WBD shareholders in the hopes of preempting the winning Netflix cash and stock bid of $28/share for the streaming and studios division. Among other things, Paramount said that its bid — which is unchanged from that which it submitted to the WBD board of directors — is superior because it is for the entire company, including the linear cable networks that are set to be spun off into a new venture called Discovery Global next year.
WBD earlier this year split its properties into a streaming and studios division consisting of the Warner Bros. film and television studios, the HBO Max streaming service and HBO, and a “global networks” business consisting of its linear cable networks. Those networks include the TNT Sports channels of TNT, TBS and truTV, the cable news network CNN and additional assets.
Paramount argued Monday that the global networks business constitutes “a sub-scale and highly leveraged stub” which CEO David Ellison said on CNBC Monday should be valued at $1/share. The winning Netflix bid, Paramount said in its announcement, is “based on an illusory prospective valuation of Global Networks that is unsupported by the business fundamentals and encumbered by high levels of financial leverage assigned to the entity.”
On a website advocating for its takeover attempt, Paramount was even more explicit, saying that the Netflix bid would leave WBD shareholders “exposed to a highly-levered and structurally declining asset” in global networks.
Prior to the beginning of sale talks, which were initiated after Paramount made three unsolicited bids for the company, WBD had announced plans to spin off the linear networks, and much of its debt, into a new venture called Discovery Global. Unlike Paramount, the only WBD bidder seeking to acquire the company in full, Netflix (and Comcast) bid only for the streaming and studios properties, allowing WBD to move forward with the planned split. Per the announcement last week, the spinoff is now expected to occur in Q3 of next year.
For TNT Sports, the options at this point are absorption into some combination with CBS Sports or existing independently without the backing of a major media conglomerate. Paramount touted the sports possibilities of its bid, arguing that it would create a “premier platform for global sports across all distribution formats” and listing properties from the NFL (owned by Paramount) to the NHL (owned by WBD). (One notable oversight — the listing of rights did not include the WBD property Major League Baseball.)
In its offer, Paramount is valuing WBD at approximately $108 billion including debt. Should Netflix fail to close the deal with Warner Bros. Discovery because of not receiving the needed approvals, it would need to pay a $5.8 billion breakup fee. If WBD was to accept “a superior unsolicited bid from Paramount” or another rival, it would need to pay Netflix $2.8 billion. Amended bylaws for WBD effective as of early June 2025 indicate that a threshold of at least 20% of shareholders can vote to call a special meeting, which could potentially fight off a hostile bid attempt.
Derek Futterman contributed reporting to this article.
