Paramount Deploys New Weapon In Hostile Bid To Block Netflix-Warner Bros. Deal: Human Greed
Still refusing to accept Warner Bros.’ decision to sell the entirety of their assets to Netflix, a desperate Paramount Skydance has abandoned their previous strategy of ‘begging their fellow American film institution not to go through with the deal’ and is now attempting to undercut the deal in their favor by way of ‘appealing to human greed’.
Recapping their side of the story in the official legal filing announcing their intent to make a hostile post-Netflix-confirmation bid for Warner Bros., Paramount Skydance explained:
“Paramount made six proposals over twelve weeks to the Warner Bros. Board. The first proposal was made when Warner Bros. common stock was merely $12.57 per share (having traded as low as $7.52 in the months earlier). Each Paramount proposal increased its offered value (with the final two being 100% cash) culminating in the all cash offer of $30 per share. The final proposal stated Paramount was ready to immediately sign the transaction, accompanied by fully executable agreements with fully committed debt financing and fully committed equity financing from the Ellison family.”
“Despite these facts, the Warner Bros. Board and its advisors chose on that pivotal December 4th to make no effort to even speak with Paramount or its representatives about anything. Instead, the Warner Bros. Board, in possession of a $30 per share cash offer with a clearer and faster path to regulatory approval, committed Warner Bros. and its stockholders to an obviously financially inferior transaction with extraordinary regulatory risk and a longer timeline to a possible closing.”
And with CEO David Ellison having no luck in his subsequent grovelling to Warner Bros. CEO David Zaslav, Skydance Studios circumvented around WB’s leadership and sent a December 10th letter directly to the DC parent company’s shareholders begging them to reject Netflix’s offer, their primary resting on their belief that current holdings were worth far more than what Netflix was offering for them:
“Our public offer – identical to the terms we presented to WBD privately – delivers superior value and a faster, more certain path to completion than the transaction announced with Netflix. IT IS NOT TOO LATE TO REALIZE THE BENEFITS OF PARAMOUNT’S PROPOSAL IF YOU CHOOSE TO ACT NOW AND TENDER YOUR SHARES.”
“Our offer is financially superior to Netflix’s transaction, which provides WBD shareholders with lower value, less cash and significantly less certainty. On its face, Netflix is offering WBD shareholders $23.25 per share in cash, $4.50 in stock and a share in WBD’s Global Networks spin-off. In reality, however, the total value is materially lower than advertised.”
“Since Monday, we have had the opportunity to speak with a number of WBD shareholders who have expressed confusion and disappointment at the process that WBD conducted, which appears to have prioritized a deal with Netflix over shareholder value maximization. Multiple equity research notes published over the last 48 hours have also agreed that our offer is superior and that the Global Networks spin-off does not close the gap to $30.00 in cash.”
“WE URGE YOU TO REGISTER YOUR VIEW WITH THE WBD BOARD THAT YOU DEEM PARAMOUNT’S OFFER TO BE SUPERIOR BY TENDERING YOUR SHARES TODAY.”
With the letter only being issued today, Paramount Skydance’s latest Hail Mary currently exists as a case of ‘It’s a bold strategy, Cotton. Let’s see if it works out for them,” especially as no major shareholder nor any representative of either Netflix or Warner Bros. has yet to publicly comment on the letter.
