Paramount Skydance makes counterbid for Warner Bros. Discovery, valued at $108 billion

Paramount Skydance is not giving up. Despite the takeover offer drawn up by Netflix last week, the television and cinema group led by David Ellison still wants to get its hands on Warner Bros Discovery (WBD). This Monday, Paramount Skydance announced in a press release that it had presented a counter-offer for a buyout, valued at $30 per share, or $108.4 billion in total.

Unlike Netflix, which is only offering to buy, essentially, only the Warner Bros studio and the HBO Max streaming platform for $83 billion (including debt), Paramount Skydance wants to acquire the entire WBD, including its portfolio of television channels.

“Strategically and financially, Paramount’s offer is a superior alternative to that of Netflix for shareholders”, considers Paramount Skydance in particular, praising a more interesting offer in terms of “price”, “structure”, but also “schedule and regulatory certainty”.

Cable TV is eroding

Before studying a sale, Warner Bros. Discovery planned to split these channels, which include CNN and Discovery, from the rest of the group, estimating their lower growth potential in a context of erosion of cable television in the United States.

Paramount Skydance was the first to express its interest in Warner Bros. Discovery and submitted at least five offers, before this Monday, but the WBD board preferred Netflix, which also beat the cable operator Comcast to the post.

To try to convince the board of directors of WBD and its shareholders, Paramount Skydance is ready to finance its offer entirely in cash, while that of Netflix included a part in shares.

The group managed to raise this colossal sum by relying, in part, on the assets of the Ellison family, the patriarch, Larry, being one of the richest men in the world, with a fortune estimated at $270 billion by the Forbes magazine website.

Donald Trump’s restlessness

On Sunday, on the sidelines of a ceremony in Washington, Donald Trump expressed doubts about the advisability of a union between Netflix and Warner Bros. Netflix already has “a very large market share”, he recalled, which “could be a problem”.

This merger would, in fact, bring together two of the three largest global paid video on demand platforms (excluding Amazon Prime, with the hybrid model), i.e. more than 300 million subscribers for Netflix and 128 for HBO Max.

“Letting the world’s leading streaming service merge with the third is bad for competition,” said David Ellison.

The person also has the ear of Donald Trump, who is close to his father Larry, who contributed financially to the American president’s electoral campaigns.

The boss of Paramount Skydance obtained, in July, the green light from the American telecoms and television regulator, the FCC, to acquire Paramount after promising a change in the editorial line of CBS, the Paramount group channel much criticized by Donald Trump.