Last evening, December 8, a new development in the situation with the sale of Warner Bros. Discovery was revealed. Paramount announced that it does not intend to hand over the media giant to Netflix competitors and wants to acquire it itself.
Paramount made a direct offer to the shareholders of Warner Bros. Discovery. They stated they are prepared to pay $30 per share — $2.25 more than Netflix offers. This would bring the total value of Warner Bros. Discovery to $108.4 billion. Moreover, Paramount plans to pay the entire amount in cash.
Paramount also emphasized that it wants to purchase Warner Bros. Discovery in its entirety. In contrast, Netflix is only interested in the streaming division and the media giant’s studios, excluding the Global Networks business segment, which includes CNN, TNT Sports, Discovery, and several other channels and digital services.
Paramount hopes that if successful, it will be able to secure approval for the deal from antitrust regulators within a year.
Additionally, in a report to the U.S. Securities and Exchange Commission, Paramount added that part of the funding for the purchase of Warner Bros. Discovery will be provided by financial partners. Among them are the Ellison family (David Ellison, son of billionaire Larry Ellison, currently heads Paramount — editor’s note), RedBird Capital, Affinity Partners, L’imad Holding Company, and the Sovereign Funds of Saudi Arabia and Qatar.
It is worth noting that if the deal between Netflix and Warner Bros. Discovery fails, one party will have to pay a penalty. If Warner Bros. Discovery is the initiator of the breakup (for instance, if it agrees to Paramount’s offer), the company will have to transfer $2.8 billion to Netflix. However, if the fault lies with Netflix, or if antitrust regulators block the deal, then Netflix will pay Warner Bros. Discovery $5.8 billion.