Paramount Stakes Claim as Top Bidder for Warner Bros, Touts Superior Deal Over Netflix
Image Source: Internet
{ "title": "Paramount Stakes Claim as Top Bidder for Warner Bros, Touts Superior Deal Over Netflix", "article": "In a bid to sway investors, Paramount has reiterated its $108.4 billion offer for Warner Bros Discovery, arguing it surpasses Netflix's $82.7 billion deal. Paramount's argument centers on its all-cash offer of $30 per share, which it claims is superior to Netflix's cash-and-stock deal worth $27.75 per share. Warner Bros Discovery's board rejected Paramount's amended hostile offer, which included a $40 billion equity personally guaranteed by Oracle co-founder Larry Ellison. The board cited concerns over Paramount's debt financing and the potential risks for Warner Bros shareholders in the event of deal failure. Paramount has responded by devaluing the cable properties of CNN and Discovery, suggesting they are effectively worthless. This assertion is based on the performance of Versant Media, a Comcast spinoff that includes digital assets and TV channels such as CNBC. The stock has dropped 18% since its market debut, providing fresh ammunition for Paramount's campaign to convince Warner Bros shareholders of its superior offer. Paramount argues that the Netflix deal would reduce the cash payout to shareholders if Warner Bros loads more debt onto the merger. The company claims the cash payout could drop to $20 per share, from the current offer of $23.25, if Warner Bros were to adopt the leverage in line with Versant. Warner Bros has not commented on Paramount's latest offer, but has stated its preference for Netflix's deal, which requires no equity financing and is backed by $59 billion in debt from banks. The company has also expressed concerns over the potential risks and costs associated with Paramount's bid. The regulatory landscape for either suitor remains uncertain, with bipartisan lawmakers raising concerns over the potential harm for consumers and creatives. Paramount's bid would create a studio bigger than market leader Disney, while Netflix's deal would cement its dominance with a combined 428 million subscribers."
