Paramount Launches Aggressive Counter-Bid to Hijack Netflix's WBD Acquisition

The battle for Hollywood’s crown jewel, Warner Bros. Discovery (WBD), escalated dramatically on Monday as Paramount executed a hostile takeover bid for the entire company, a brazen maneuver launched just three days after Netflix secured an $83$ billion agreement to acquire a significant portion of the media conglomerate.

Paramount, led by CEO David Ellison, circumvented the WBD board and went directly to shareholders with what the company asserts is a superior, all-cash offer. The bid is for $30 per share, valuing the entirety of WBD, including debt, at approximately $108 billion. This represents a considerable premium over the Netflix deal, which valued the company at an enterprise value of around $83 billion, based on a mix of cash and stock at $27.75$ per share.

The Superior Value Argument and Regulatory Scrutiny

Paramount's strategic rationale is two-fold: superior financial value and a clearer path through antitrust review. The company is seeking to acquire all WBD assets, including the Warner Bros. movie studio, the Max streaming service, and the entire portfolio of linear cable channels (such as CNN, TNT, TBS, HGTV, and Food Network)—assets that were deliberately excluded from the Netflix transaction.

Ellison emphasized the benefits of this comprehensive approach in a press release, stating, “We believe our offer will create a stronger Hollywood. It is in the best interests of the creative community, consumers and the movie theater industry.”

Paramount further accused the WBD board of pursuing an "inferior proposal" that faces a "challenging regulatory approval process." This criticism stems from the fact that the Netflix transaction, which would combine two massive streaming services (Netflix and Max) and the formidable Warner Bros. film library, would greatly enhance Netflix’s market power.

Ellison was explicit in his critique of the anticipated antitrust review for Netflix, arguing that its size in the streaming market—even if it attempts to define its business as part of a broader "overall TV viewership" market—is problematic. He used a sharp analogy, claiming, "Saying that streaming is not a market is a little bit like looking at the beverage market and saying that Coke and Pepsi can merge because Budweiser is a replacement to it."

Financial Backing and Political Undercurrents

In a move intended to demonstrate the seriousness and certainty of its offer, Paramount publicly disclosed its large coalition of financial backers. The bid is "fully backstopped" by the Ellison family and includes significant financial commitments from sovereign wealth funds in the Middle East, including Saudi Arabia’s Public Investment Fund and the Qatar Investment Authority. Also listed as an investment partner is Affinity Partners, the investment firm founded by Jared Kushner, President Trump’s son-in-law.

The regulatory environment remains highly uncertain for both bids. President Trump weighed in on Sunday, praising Netflix co-CEO Ted Sarandos but adding that the company’s "very big market share" was a concern, indicating he would be "involved" in the regulatory review. This political entanglement highlights a potential advantage for Paramount, given the reported ties between the Ellison family and the administration. Netflix, meanwhile, is expected to argue its case using the same successful defense employed by Meta in a recent monopoly case, asserting that the relevant market includes wider platforms like YouTube, TikTok, Amazon, and Apple.

Transaction Fallout and Hollywood Anxiety

The Netflix deal, approved by both company boards on Friday, immediately sent ripples of anxiety through Hollywood. Many observers fear the deal would eventually marginalize theatrical releases for one of the few remaining major film studios, despite Netflix’s pledge to maintain theatrical releases for Warner Bros. Discovery movies. The subsequent launch of Paramount's hostile bid—a mechanism relatively uncommon in the top tier of the media industry—caused WBD stock to rise nearly 5% on Monday morning, climbing from its Friday closing price of $26 a share to $27.30.

Ellison confirmed on a conference call that the hostile action was taken because the WBD board failed to respond to Paramount's superior proposal last week, adding that the bid was not its "best and final" offer.

The regulatory documents filed for the Netflix deal reveal the high stakes: if the transaction is blocked due to a failure to secure necessary approvals, Netflix would owe WBD a hefty $5.8 billion breakup fee. However, if WBD accepts the superior, unsolicited bid from Paramount, it would owe Netflix a lesser $2.8 billion termination fee. WBD has offered no immediate comment on Paramount's aggressive tender offer.