It Ain't Over—Paramount Makes New Bid for WBD

Just days after Netflix announced its $82.7 billion deal to acquire Warner Bros. Discovery's studio and streaming assets, Paramount Skydance is taking the fight directly to shareholders with a hostile takeover bid.

Paramount announced Monday that it's offering $30 per share in all-cash for the entirety of Warner Bros. Discovery—including the film studio, HBO Max, and the cable networks that Netflix doesn't want (CNN, TBS, TNT, and other networks).

The offer values the company at $108.4 billion in enterprise value, significantly above Netflix's mixed-cash-and-stock proposal of $27.75 per share.

David Ellison's Paramount has been pursuing Warner Bros. Discovery since September, submitting multiple bids before the company opened a formal sale process.

When Warner Bros. Discovery's board chose Netflix's offer last week, Ellison decided to bypass management entirely and appeal directly to shareholders.

Ellison said in a statement:

"WBD shareholders deserve an opportunity to consider our superior all-cash offer for their shares in the entire company. Our public offer, which is on the same terms we provided to the Warner Bros. Discovery Board of Directors in private, provides superior value, and a more certain and quicker path to completion. We believe the WBD Board of Directors is pursuing an inferior proposal which exposes shareholders to a mix of cash and stock, an uncertain future trading value of the Global Networks linear cable business and a challenging regulatory approval process. We are taking our offer directly to shareholders to give them the opportunity to act in their own best interests and maximize the value of their shares."

The bid is backed by financing from Larry Ellison's family, RedBird Capital, and three Middle Eastern sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi.

Paramount has accused Warner Bros. Discovery's board of running a "tainted" sales process that favored Netflix from the start (per Variety).

“We’re really here to finish what we started,” Ellison told CNBC’s Squawk on the Street on Monday. “We put the company in play.”

The company argues its all-cash offer provides more certainty than Netflix's complex structure, which includes stock and leaves shareholders with shares in a spun-off cable network business.

The move creates a messy situation for an already complicated deal.

Netflix's acquisition faces significant regulatory hurdles and vocal opposition from filmmakers and theater owners concerned about theatrical distribution. Now, Paramount is betting shareholders will prefer its higher, simpler offer, even if it means keeping the struggling cable networks that Warner Bros. Discovery was trying to shed.

We've been tracking the bidding war since Warner Bros. Discovery officially put itself up for sale. We'll let you know how this pans out.